 Yogi on Positioning:
When it comes to strategic thinking, don't make "too many wrong mistakes"
By Mark W. Sheffert
September 2006
One of the things I like about Yogi Berra is his ability to put words together in ways that nobody else would even think of doing. However, the power behind Yogi-isms is his simple logic. While Yogi takes a different approach than you or I might to get to his point, in the end it’s usually the fastest and truest route. For instance: “When you come to a fork in the road, take it.”
This is one of my favorite nuggets of wisdom from Yogi. For me, it creates a fantastic mental picture of business leaders making decisions about one of the greatest dilemmas in business: strategic positioning.
I envision a boardroom full of executives and marketing folks bantering about sustainable competitive advantages and what makes the company unique, and whether it’s what their target market wants. The analytical ones cite market-research numbers while the creative ones argue about what the customer really values and what the competition will come up with next. There’s no clear path, no easy decision about which fork in the road to take.
“You can observe a lot by watching.”
I’ve observed many strategic-planning meetings that look that way, and you probably have too, because that’s how strategic positioning is managed in most businesses—by thinking about how you believe potential buyers see your products or services relative to those of your competitors. For the past 25 years, positioning has been all about how to grow market share by beating up the competition.
We’ve been taught to use the four Ps of marketing (product, price, promotion, place) to position our products and services first in the minds of potential customers. In fact, the classic business book Marketing Warfare by Al Ries and Jack Trout is based on the premise that “marketing is war, where the enemy is the competition and the customer is the ground to be won.”
And this approach worked—until the economy changed into a huge, global, constantly evolving monster with an enormous appetite for the slow and weak (but not necessarily small) stragglers. The time is now for changing the way we think about strategic positioning (with some more help from Yogi).
“The future ain’t what it used to be.”
Let’s start by defining strategic positioning. It’s the essence of your business. Take your mission statement, corporate values and reputation, strategic plan, and products and services, bundle them all together, and you’ve got your strategic position.
In this context, positioning is much more than a marketing or public relations tactic—it’s an inherent component of strategy. Positioning is all about what comes to mind with your product or brand. It is created through product design, benefits and features, marketing messages and promotions, where and how the products or services are delivered to customers and at what price level, who the customers are, and the company’s reputation for quality and ethics. In short, your market position is who you are, what you do, where you do it, how you deliver it, and why you do it (corporate values). It takes years to create, is difficult to change, and affects the success or failure of the business.
“I wish I had an answer to that, because I’m tired of answering that question.”
The classic method of developing a positioning strategy—one that I’ve used for many years—is to first segment your markets, rating their attractiveness from low to high as measured by each market’s economics and profitability, size and growth, industry structure and competitive dynamics, environmental factors, and risks.
The second step is to assess your competitive position in each market, rating it from low to high as measured by relative market share, relative profitability, sustainability of key success factors, competition, and your strengths and weaknesses.
By plotting your products and services on a matrix according to their market attractiveness and competitive position, a clear illustration is produced that shows the areas to milk, starve, feed, or grow. Those with high market opportunity and low competitive position are obviously where the big bucks should go; conversely, those with low market opportunity and high competition should be what you run from.
However, this exercise only illustrates the best opportunities for your business at the moment you do the exercise. When the market changes, you need to rethink where you are on the matrix and reset your strategic position.
“Nobody goes there anymore, it’s too crowded.”
Because markets change, leaders need to also focus on big-picture strategy, not just on the competition or sustainable competitive advantages. This is even more essential right now, because the nature of competition has changed.
From 1945 to the mid-1970s, the economy was running with more demand than supply, so producers ran the show (particularly American producers). U.S. products and services were “pushed” out to and eagerly consumed by customers excited to buy their first television or willing to wait for their special-order car.
Then suddenly, the economy included competitors from Japan, Korea, Taiwan, and Europe. Consumers began to have more choices and more money to spend; the tide was turning. And now, with virtually unlimited choices available from around the world, we’re in a “pull” economy, where the customer is in charge.
Unfortunately, many business leaders have failed to recognize the truth of this Yogi-ism: “A nickel ain’t worth a dime anymore.” They still believe in the same old strategic positioning: making generic products for large numbers of customers who have similar needs; working with long production runs and expecting long product cycles; managing a stable organization. They don’t realize that the rules have changed.
If you want to be a winning organization today, you need to value innovation and offer tailored products for smaller numbers of customers who have dissimilar needs in fragmented markets, and be flexible in manufacturing, with shorter product cycles and a fast and nimble organization.
“If the people don’t want to come out to the ballpark, nobody’s going to stop ’em.”
Nimble business leaders understand that people change their minds about coming to the ballpark, so they don’t let their companies get into a strategic-positioning rut. Instead, they create a new market where there is virtually no competition and they can provide genuine customer value.
Ries and Trout call this “guerrilla warfare,” and advocate it as a tactic for businesses that want to fight the largest market-share holders. In today’s economy, though, I advocate this for virtually every business: Find unoccupied market space and an opportunity for highly profitable growth with no competition. Some call it a “sweet spot.”
“If you can’t imitate him, don’t copy him.”
Don’t imitate your competitors, outfox them by finding a different place to compete. For example, pick the high end of the market and make a product that’s worth its high price. Twenty years ago, nobody believed that a market existed for a $4 cup of coffee, but Starbucks showed the world that there’s always a segment of the market that wants the best and is willing to pay for it.
Or pick a segment of the market that is underserved. Family Dollar stores are thriving in lower-income neighborhoods where Wal-Mart and Target are not going, for example. Or find a geographic market where you can compete “under the radar” of the competition, like the pharmaceutical companies that are expanding into overseas markets.
“Ninety percent of the game is half mental.”
But don’t pick a segment willy-nilly. Be a strategic thinker. Figure out what you do best and how you can provide the best value to your customers—and how you can prove it. Saying “we can save you money” just doesn’t cut it anymore. You have to gain the trust of customers by offering proof of your positioning statements. Figure out in real dollars how your service or widget could potentially improve a business customer’s profitability, for example. Or illustrate in tangible ways how your product saves time for consumers. Or provide case studies and testimonials from former customers.
“You gotta be careful if you don’t know where you’re going, because you might not get there.”
Strategic positioning should be an essential component of your strategic and business plan. It’s what decides which fork in the road you should take and, in large part, determines how successful you will be. In today’s rapidly changing global economy, it’s vital to think about the future and the strategic position of your company. And although it might seem like something you can do tomorrow, it’s important to do it now. Yogi could have been talking about future forks in the road for your business when he said: “It’s not too far, it just seems like it is.”
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