The Bowman’s Strategy Clock was developed by the two famous economists Cliff Bowman and David Faulkner. The main focus of the model is to make the companies aware of their position in the market as compared to their competitors.
It is purely a marketing model that helps the companies to analyze their position in the market. As per Bowman, the factor of competitive advantage is then the factor of cost advantage as it works as a distinctive element for the company and harps on the strategic positioning and the overall positioning of the product in the market.
The two dimensions of the Bowman’s Strategy Clock :
The Bowman’s Strategy Clock highlights the aspects on how a company can position its products or service offerings in the market based on the two dimensions. First is about the price whereas the second is about the perceived value of the product, service, and the overall brand.
Harping on both the dimensions and its various combinations with the Bowman’s Strategy Clock, there are eight possible and effective strategies that a company can opt and all these eight strategies are divided over the four quadrants. All these eight strategies are displayed in a clock format adhering to the name of the model.
The management of the company can choose its position from the Bowman’s Strategy Clock that offers it the most competitive advantage in the market as compared to its competitors and results in its growth and overall development and attainment of its business objectives.
And if the management of the company is able to understand these eight crucial and fundamental strategic positions of the model, it will enable them to analyze and evaluate the current strategy in a better and optimal manner. As a result, the model can help them to make the necessary changes and improve the competitive position in the market and in the minds of the customers.
The eight positions of the Bowman’s Strategy Clock :
1) Low price and low added value
In this strategy position, keeping the price relatively low is the only means of the competitive method that the company can use to compete with its contemporaries in the market. The price of the product or service offerings is very low and the product or service is not distinguished and the customer perceives very little value. It is not the most competitive position within the framework of the Bowman’s Strategy Clock.
2) Low Price
The companies following this strategy of the Bowman’s Strategy Clock often produce large quantities of the products plus their products are valued in the target market. The various and possible price wars are fought between the competitive brands in this position.
The products are often sold at a low price leading to the low-profit margins on the individual products but the high volume of the output can still generate the high amount of profits for the company. This position in the strategy clock regards the cheaper market leaders who have their main focus on the cost minimizations with the means of cheap and quick production using the facet of economies of scale.
This strategy in the Bowman’s Strategy Clock is very effective if the added value of the products is consistent in nature and is well applied and offered on the regular basis.
On one hand, this strategic position involves the companies focusing on the aspect of product differentiation which makes their products highly valued in the market and in the minds of the customers and on the other hand the company’s focus is on the low price making it a hybrid model. The customer is convinced that the good value product at a low price is offered to them that benefits them in a genuine way.
The companies opting for the differentiation strategy of the Bowman’s Strategy Clock tries there level best to offer the products that high on the realms of quality at an average price and wish to offer their customers the highest level of the perceived added value that makes them curate a distinctive identity in the market.
Apart from focusing on the product quality, they put significant efforts on the branding making their brand a reliable one to retain the loyal set of customers. The customers are even ready to pay more for these products as they are sensitive to the high-quality products of a renowned brand in the market.
5) Focused Differentiation
This strategy from the Bowman’s Strategy Clock is mainly applicable to the brands that focus on the luxury and exclusive products that are high on quality and are sold at a high price. The higher profit margins are attained by such companies as they use targeted promotions, marketing, distribution, and segmentation strategies. Their competitors are in the similar market segment and there is a tussle by keeping the prices of products high than the other.
6) Risky High Margins
The companies using this strategy from the model charge high prices for the products that are perceived as mediocre in value by the customers. It is the very risky strategy to opt for and the position of the company is most likely to fail in the long-term. The customers will look for the better quality product in the similar price range or a similar type of product at a lower price to cut their costs with an objective of value for money.
7) Monopoly Pricing
In this position of the strategy clock the company’s position themselves as the monopoly leader in the market as they are the only ones offering the specific type of product in the market. And as a result, there is no fear of the competition and they are the only one determining the price of the product.
The customers are left with the two choices to buy the product or not to buy the product as they are totally dependent on the products or services offered by the monopolistic brand. Usually, in most of the countries, the authorities regulate the monopolistic market to prevent the companies from increasing the prices and offering faulty products and services.
This strategic position in the Bowman’s Strategy Clock is not a very desirable one for any company as it basically means that the company is not able to offer the products or services that the customers value. The customers do not indulge in the purchase as the price is too high. The companies in this segment opt for the standard prices of their product offerings to stay relevant and competitive in the market and in the minds of the customers.
The outlook of the Bowman’s Strategy Clock :
The main and basic intention of the Bowman’s Strategy Clock is for the companies to analyze and understand that how the products should be positioned in the market to gain the competitive advantage.
Looking and understanding the above mentioned eight strategies, you would be able to view that the three strategic positions no’s 6, 7, and 8 are uncompetitive in nature and approach as these are the one where product price is greater than the perceived value in the minds of the customers. Considering that the market always operates on the highly competitive level, there will be competitors that will offer a higher perceived value of the product for the same price or the lower price of the product for the same perceived value.