What is Competitive Positioning, Anyway?

If you run or work for a business, you’ve probably heard some version of the term “competitive positioning” thrown around before. It sounds like one of those abstract business concepts, but it’s actually super important. Competitive positioning is basically how your company stakes out a unique place in the minds of customers versus alternatives. It encapsulates your brand personality,messaging, products, and overall vibe.

But let’s back up a sec. Why does positioning even matter in the first place?

Well, think of it this way. No matter what you sell or who you serve, chances are there are going to be competitors gunning for the same business. Even in a blue ocean scenario where you’ve uncovered some massive underserved market, copycats will come. Positioning acts as your compass to stand out from the pack and give customers a reason to choose you.

Without consciously defining your positioning, you risk blending into a sea of sameness. Game over. But if you can nail a positioning that feels authentic, communicates your strengths, and resonates with your audience? You’ve got yourself a competitive advantage.

So yeah, positioning matters big time. But how do you actually go about determining the right competitive position? The key steps:

Take an honest look inward to understand your company’s core strengths and weaknesses. Can’t position effectively without self-awareness.

Analyze your competitive landscape and market dynamics. Find the white space opportunities.

Decide on a positioning strategy that aligns with your business realities and target customers.

Bring your chosen positioning to life through consistent messaging, product decisions, customer experiences, etc.

Spread the word far and wide. You have to educate the market to make it stick.

Keep that positioning feeling fresh and relevant over time as things change.

That’s essentially the framework we’ll be covering here. But before jumping into the nuts and bolts, let’s get clear on what competitive positioning really entails.

Understanding Competitive Positioning 

Before determining where you want your company to be positioned, it’s important to understand what competitive positioning really means. 

Competitive positioning refers to how a company defines its brand and product offerings compared to direct competitors. The goal is to establish a sustainable niche that gives you an advantage with your target customers. 

Some key things to know about competitive positioning:

– It’s how customers perceive you, not what you state you are

– It’s relative to competitors, not absolute

– It should be aspirational yet believable 

– It needs to be durable and difficult to copy

– It must align with company strengths and capabilities  

The essence of positioning is sacrifice and focus. You have to be willing to give up certain perceptions in order to own the position you desire. 

Common positioning strategies include:

– Low-cost provider

– Premium player 

– Innovation leader

– Design and experience focused 

– Mass market vs. niche player

– Local vs. global presence

– Generalist vs. specialist 

– Speed and efficiency focused

We’ll explore the pros and cons of various strategies later on. The key is picking a position that aligns with your core competencies and resonates with your target audience. Before deciding on a position, you first need to thoroughly assess your business from the inside and out.

Assessing Your Company’s Strengths and Weaknesses

The next step is taking an objective look within your company to understand your true strengths, weaknesses, and capabilities. A few techniques and questions to guide your assessment:

Examine your assets and resources – What unique assets, IP, technology, data, partnerships or distribution do you control? Where are the gaps?

Audit capabilities – What do you excel at vs. struggle with? Review core competencies across functions like R&D, marketing, ops, etc. 

Analyze profit drivers – What are your highest margin products and revenue streams? Where is profitability lacking? 

Talk to employees – Get feedback from staff in different roles. What do they see as strengths/weaknesses?

Consult experts – Get input from objective outsiders like consultants or advisory boards.

Review customer feedback – Look at satisfaction surveys, reviews, and buyer conversations. What stands out?

Analyze past performance – What has fueled growth and success to date? What hasn’t worked in the past and why?

The output should be an honest picture of what your company is truly great at along with priority areas for improvement. This will help shape positioning possibilities.

Analyzing the Competitive Landscape

Next you need to conduct in-depth analysis of your competitive landscape. The goal is to identify potential “white space” where your company can win over customers.

Map your competitive set – Which companies directly compete for the same customers and market share?  

Study competitors – What are their positioning strategies, product mix, pricing, etc? Where are they investing?

Assess competitive strength – Use Porter’s framework to assess factors like rivalry, barriers to entry, supplier power, etc.

Talk to customers – Get feedback on competitor perceptions, strengths/weaknesses, and unmet needs.

Run win/loss analysis – Why are you winning/losing deals to key competitors? Identify patterns.

Find gaps in positioning – Are certain messages, customer segments, or needs underserved?

Look beyond direct competitors – How can you reframe the competitive set to your advantage?

Consider future shifts – How is the competitive landscape likely to change in 1-3 years?

Thorough competitor and industry analysis will reveal openings to stake out a differentiated position aligned with customer needs. Now the question becomes which option makes the most strategic sense. 

Choosing a Positioning Strategy

With internal realities and customer/competitor considerations in mind, you’re now ready to define possible positioning strategies. 

Here are some of the most common types of positioning to consider:

Low-Cost Provider

Focused on maintaining the lowest price point and lean operations to drive value. e.g. Walmart, Southwest Airlines, Brandless.

Best for: Price-sensitive market segments with need for low costs above all else.

Risks: Can be difficult to maintain advantage as competitors drop prices. May need high volumes. Perceived as lower quality.

Premium Player 

Highest-priced provider with premium branding, best-in-class quality and unmatched experience. e.g. Mercedes, Apple, Ritz-Carlton.

Best for: Customers who prioritize quality and experience over price. Prestige products/categories.

Risks: Vulnerable to market downturns. Dependent on maintaining premium perception and justification.

Innovation Leader

Focused on product innovation, advanced technology and continuous R&D. e.g. Tesla, Amazon, Apple.

Best for: Dynamic, tech-driven categories. Enthusiast buyer profiles. First-mover advantage.

Risks: High investment costs. Needs strong tech/engineering team. Fast follower rivals.

Design and User-Focused 

Obsessively focused on world-class design, user experience and brand appeal. e.g. Apple, Porsche, Airbnb.

Best for: Categories where design/UX are top purchase drivers. Premium and lifestyle products.

Risks: Challenging to maintain design excellence over time. Can lack focus on practical functionality.

Mass Market Player

Broad, maximal reach across mainstream consumer segments. e.g. Coca-Cola, McDonald’s, Amazon.

Best for: Core commoditized categories where scale provides advantage. Broad consumer appeal.

Risks: Jack of all trades, master of none. Vulnerable to targeted niche rivals.

Niche / Specialist

Deep specialization on a focused market segment, product line or unmet consumer need. e.g. Shopify – ecommerce.

Best for: Unique user needs requiring custom solutions. Avoiding direct rivalry with generalists. 

Risks: Limited market size. Still vulnerable to competitors also specializing. 

These cover some of the most common positioning frameworks, but there are unlimited variations and blends. The best option depends on your specific company, product, audience and context.

Differentiating Your Brand

Once you’ve settled on a competitive position, the critical next step is bringing it to life – making it tangible for customers.

You’ll want to develop 3-5 succinct messages that capture the essence of your desired positioning. Then, reinforce those messages consistently across all touchpoints:

Messaging

– Brand taglines

– Homepage & product messaging 

– Ad campaigns

– Email / content marketing

Product

– Design elements

– Features

– Packaging

Pricing 

– Price points / tiers

– Discounts

– Bundling

Customer Experience 

– Retail atmosphere & visuals

– Support options & policies 

– Service level tiers

Partners & Influencers

– KOLs, brand advocates

– Sponsorships & events

– Co-marketing deals

Every brand interaction either reinforces or dilutes your positioning. Consistency is key. Measure success through brand health surveys and win/loss assessments over time.

Communicating Your Positioning

For your positioning to take hold, you need to proactively educate the market – especially customers and influencers. 

Some ideas for spreading the word:

Press coverage – Pitch media contacts on your new positioning and why it matters. Aim for product reviews and competitive comparisons.

Thought leadership content – Publish blogs, guides and videos showcasing your point of difference.

Advertising – Dedicate campaigns to telling your new positioning story across channels.

In-product messaging – Educate users directly within your application and user flows.

Sales collateral – Arm your sales team with one-pagers, presentations decks, ROI calculators, etc.

Events – Host live or virtual events positioning your company vs. competitors.  

Reviews – Proactively seek positive reviews on G2, Capterra, App Store, etc. 

Influencers – Engage analysts, bloggers, advocates to reinforce messaging through impressions.

Monitor impression volume and content sentiment to gauge market penetration. Now let’s look at keeping positioning sharp long-term.

Keeping Your Positioning Relevant  

Once established, competitive positioning rarely stays static. Markets shift, new competitors emerge and customer needs evolve. 

Here are some best practices for keeping your positioning relevant:

– Track market changes proactively through competitive intel, customer surveys, win/loss analysis and more.

– Revisit positioning every 1-2 years through updated research. Be ready to refine. 

– Link positioning to strategy so it adapts with pricing, feature set, segmentation, etc.

– Extend positioning into new segments, products and geographies when it makes sense.

– Train employees on positioning and how their role brings it to life.

– Stay vigilant on competitors copying your position and have counter-strategies ready.

– Make needed sacrifices to protect positioning – even if painful short-term.

With the right positioning, your company can gain focus, unlock differentiation and tap into powerful customer motivations. Just be sure to do the work upfront to choose, reinforce and sustain the right positioning long-term. Use this guide to chart your positioning strategy and drive competitive advantage.

Conclusion

Choosing the right competitive positioning is a strategic imperative for business success. This comprehensive guide walked through the step-by-step process to:

– Assess company strengths and capabilities

– Analyze the competitive landscape

– Determine possible positioning strategies

– Choose and reinforce the optimal position

– Communicate positioning to the market 

– Keep it relevant long-term

With the framework and best practices provided, you now have a blueprint to guide your positioning decisions. The work required is significant, but so is the payoff – the ability to stake out a durable competitive niche aligned with customer needs.

In closing, positioning matters. Treat it as an evolving, foundational element of your strategy. Get it right and reinforce it across everything you do. Now get out there, find your powerful, ownable position in the market and reap the rewards for years to come.