Bowman's Strategy Clock is a comprehensive way to map out positions within a marketplace based out price and perceived value. Let's take a look at some of the common questions...
What is Bowman's Strategy Clock?
Bowman’s Strategy Clock is a comprehensive and easy to use strategy tool that provides options for positioning within a market based around price and perceived value. It’s commonly used in conjunction with tools such as the Ansoff Matrix and can be seen as an alternative or extension to Porter’s Generic Strategies.
What do the positions mean on Bowman’s Strategy Clock?
There are eight positions across the clock, each highlighting a different strategy to success within a marketplace.
Position 1: Low Price & Low Value Added
This strategy is about quantity selling. The products or services are low in value and the price point is the lowest possible. The combination makes it the least competitive area on the Strategy Clock.
Position 2: Low Price
Low Price, as the name suggests, is a strategy about becoming the lowest cost option for buyers in the marketplace. It’s a strategy that can have low margins, so process efficiency and cost reduction is key for it to be successful. With this strategy, you’re aiming for high quantity levels, otherwise you can end up with low sales, low price – a fatal combination.
Position 3: Hybrid
The Hybrid position sits between low price and differentiation. It’s around ensuring the price is competitive, ideally with a low perceived price from buyers, while promoting the added value aspects of the product.
The success of the hybrid strategy comes down to the balance between cost and differentiation, attempting to maximise each while maintaining good margins.
Position 4: Differentiation
The Differentiation strategy is where a business focuses on differentiating their products or services from competitors by adding high perceived value. This strategy has a wide spectrum from full product diversity through to unique features within a core product.
For more on this strategy take a read of Porter’s Generic Strategies.
Position 5: Focused Differentiation
Focused Differentiation is about providing high value at a high price (not to be confused with Porter’s Generic Strategy of the same name, which talks about going to a niche market). When successfully done, this strategy provides high profits but can be difficult to maintain – the iPhone launch and subsequent early growth is an example of this strategy.
Position 6: Risky High Margins
Any strategy that has the name Risky in it should mean you completely understand your options before you embark on it, of course! The main thrust of this strategy is to go in with a high price point without any perceived added value.
You’re banking on a good brand in order to pull this strategy off, as often buyers will pay more for a known brand, one that has emotions associated to it, than one which is cheaper.
Position 7: Monopoly Pricing
In monopoly markets a single company controls the product and pricing, so other factors such as price points, value or competitors play less of a factor. Of course, all monopolies can come to an end – so these companies still need to keep an eye on their external factors.
Position 8: Loss of Market Share
This is generally the worst position to be in and suggests that the company is exiting the market or is in decline. It may be that they have chosen this strategy as part of a move to newer markets, or it may be forced upon them due to getting their price or market fit incorrect.
What are the advantages of Bowman’s Strategy Clock?
The advantages of Bowman’s Strategy Clock include:
- It’s simple to see and understand
- It offers a range of starting points to discuss strategy
- It’s more comprehensive than some alternatives
What are the disadvantages of Bowman’s Strategy Clock?
The disadvantages of Bowman’s Strategy Clock include:
- The lines can be blurred between the clock hands
- As a model it tends to be very focused on competitive marketplaces
What are the alternatives to Bowman’s Strategy Clock?
One of the most famous alternatives to the Strategy Clock is Porter’s Generic Strategies, another more practical framework would be Perceptual Maps. Frameworks that provide alternative strategic options also include the Ansoff Matrix and the Grand Strategy Matrix.
Who invented Bowman’s Strategy Clock?
Bowman’s Strategy Clock was developed by Cliff Bowman and David Faulkner, first published in a 1997 paper called “Competitive and Corporate Strategy”
How often should I review my position on Bowman’s Strategy Clock?
Unlike frameworks such as SWOT or PESTLE Analysis, Bowman’s Strategy Clock is more of a starting guide on deciding upon your strategic direction. As such you may refer to it when revising your overall strategy, but it’s not something that is as regularly updated as other frameworks.