What is Bowman's Strategy Clock?
Bowman’s Strategy Clock is a Tool that helps to understand How Products are Positioned in the Market.
- Its name comes from the person Who invented it: Cliff Bowman.
Its aim is to create a Visual Representation of Product Positioning that can be applied to all Types of Products.
- A Representation in the shape of a Clock.
To do so, it proposes to Analyze every Product based on 2 Dimensions.
The Two Dimensions of Bowman's Strategic Clock
- 1. Perceived Value (by Customers): How Customers Regard the Product.
- How much Customers Value the Product.
- 2. Price: The Price of the Product.
- The Relative Price, compared to the Average Market Price.
Then, Bowman’s Strategic Clock assigns each of these 2 Dimensions 3 Different Values:
- Low.
- Medium.
- High.
Two Dimensions of Bowman’s Strategy Clock.
These divisions give 8 Possible Strategic Positionings as result:
- The option Medium-Medium is neglected.
Bowman’s Strategy Clock Template.
* We have proposed a slightly different classification than the traditional one.
- We think this Classification gives more clues about the type of Product that tends to be in each Category.
Let’s see them in detail with some examples:
Low Price - Low Perceived Value
Products with: Low Price and Low Perceived Value tend to be basic Products:
- Products that we use in our Day to Day, and we don’t care much about them.
- First Need Products we don’t even know the Brand.
- Products in which we don’t look for better options.
Example
We’re sure that you have a pair of scissors in your home.
- Do you know its brand?
Probably not.
- It is the kind of product you don’t even remember where you bought it from.
In these type of Products it is very difficult to “fight” for good margins.
- People simply buy the first option they find.
Low Price - Medium Perceived Value
Products with: Low Price and Medium Perceived Value tend to be Occasional Products People like.
- Products where People look for Better options but don’t get crazy about it.
- Products where you have Preferences but not very strong ones.
- Products where you can name different Brands and why you like them.
Example
Think about Chips.
- Maybe, your favorite are Lay’s but… If there is only Pringles in a party, you won’t have much of a problem.
We all have a favorite Chips but… We like Chips over their Brand.
This makes difficult for these Products to improve their Market Share.
- Because people like them… But not enough to stick with just one option.
Low Price - High Perceived Value
Products with: Low Price and High Perceived Value tend to be Whims.
- Products we proactively consume, but only if they are of a certain Brand.
- Products we Love and consume frequently.
- Products with certain Values associated to them.
Example
If you like McDonald’s, you probably choose it over other Fast Food Restaurants.
Probably, you also like Burger King, or KFC.
- But when you go to McDonald’s, you do it on Purpose.
Maybe you love their Big Mac, or it reminds your childhood.
These types of Products must be mass produced (they are cheap) to be Profitable.
Medium Price - High Perceived Value
Products with: Medium Price and High Perceived Value tend to be Affordable Desirable Products.
- Products that you Desire and can Afford from time to time.
- Products that you can buy once a week or once a month.
- Products that you feel attached to.
Example
Converse Sneakers are legendary.
- Many people are crazy about them.
And everybody that loves them, can afford to buy them (or almost everybody).
- They are Unique, everybody recognizes them and everybody can purchase them.
These type of Products need High Quality or Associated Values to be Profitable.
- Otherwise, companies couldn’t charge more that their competitors.
High Price - High Perceived Value
Products with: High Price and High Perceived Value are Market Benchmarks.
- These are products everybody loves.
- The Best products you can find in a certain Market.
- The products that people are willing to pay more.
Example
You probably can’t afford a Porsche (and neither can we).
- But, if you like cars, you would easily agree that a Porsche is one of the Best cars money can buy.
Everybody knows that, Porsche is synonym with:
- Quality.
- Performance.
- … And Wealth.
These type of Products are very Profitable, but Require a lot of Reputation.
- And an Impeccable track Record by their Brand.
High Price - Medium Perceived Value
Products with: High Price and Medium Perceived Value tend to be Utilitarian Products.
- Products that are better than the Average and you pay more for their Quality.
- Products that you Buy on Rare Occasions and want them to last for years.
- Products that don’t have lots of Competitors.
Example
How many times in your life will you buy a Drill?
- Once, twice? (Assuming you are an average person).
That is Why, when you get yourself a Drill, you usually buy a good one.
- Because they are relatively expensive and you want them to last for years.
Also, all the options in theMarket are relatively expensive so, as you will have to spend an important amount of money (like it or not) you want the Drill to be a good one.
In these Products, Quality has to be Maintained or Improved.
- Otherwise, Customers can quickly change their Preferences.
High Price - Low Perceived Value
Products with: High Price and Low Perceived Value tend to be Captive Products.
- Products that People pay because they have to.
- Products practically nobody likes to purchase.
- Products that have no Alternative.
Example
You maybe have an Anti-Virus (we do).
Think about this: Have you ever get excited about buying a new Anti-Virus?
No. Nobody does.
- You resign yourself to do it.
These products can be very Profitable but, as soon as Customers can do without them… They don’t hesitate.
Medium Price - Low Perceived Value
Products with: Medium Price and Low Perceived Value tend to be Products with little Competition.
- Products that people don’t mind paying for, but are always looking for a Cheaper Option.
- Products whose Brands don’t say much to Customers.
- Products to which people have little Brand Loyalty.
Example
Think about your phone service company.
- You know it is important what it does, and that you need it…
But if tomorrow another company offers you lower prices… You would Change.
- Without a doubt.
In these Products, Companies should try to retain their Customers.
- With economic incentives, offers, commercials, etc.
Before we see more and more detailed examples, we want to share some Tips on How to Use Bowman’s Strategy Clock:
How to Use Bowman's Strategy Clock
First, Objectively assess where your Product is.
- Look at your Market, your Competitors and be honest.
Identify where your Product could be Positioned.
- Be Realistic: don’t confuse Desire with Reality.
Improving Perceived Value requires Important Investments.
- In Brand, and/or Quality standards.
To Improve the Price of your Product, Go for Uniqueness.
- Since “Need” is inherent to the Market.
Look for the Niche where your Product can be Competitive.
- Don’t try to tackle big Markets: Focus on small Niches with little Competition.
Now we will give you more Examplesso that you understand this Tool much better:
Bowman's Strategy Clock examples
We have chosen 3 famous companies and analyzed How their Products are Positioned in the Market.
- Using Bowman’s Strategic Clock.
Let’s see what we can learn from these Businesses:
Starbucks - Bowman's Strategy Clock example
At the beginning, Starbucks started as a Premium Coffee Business.
- Their intention was to sell high quality coffee. Nothing more.
We could say that their Product was: Low Price and Medium Perceived Value.
- Although Starbucks Coffee is good… People could do it with another Coffee.
* We say Low Price, compared with Premium Coffee options (Colombian, Jamaican, etc).
- Remember: They were “Competing” in the Premium Coffee Market.
But, over the years, Starbucks decided that their Market was not the Premium Coffe Market, but the Cafeteria Market.
They:
- Focused on the interiors (of their Cafeterias).
- Offered free wifi.
- Offered food items.
- etc.
In this New Market, its Perceived ValueImproved.
- People were willing to pay to Stay in a Comfortable Place for hours.
Nowadays, Starbucks belongs to:
- Low / Medium Price (this could be nuanced) and High Perceived Value.
- There are much more expensive Cafeterias (like Blue Bottle Coffee).
We say Low Price because, even if their Coffe is not Cheap, if you include everything (Wi-Fi, the toilet, and place) the Price is affordable.
- You won’t be ruined by going to a Starbucks regularly.
Other Cafeterias or “Social Places” are much more expensive, compared to Starbucks.
- Usually, local Cafeterias.
Starbucks is currently in the Category: Cheap Whims People Love.
IKEA - Bowman's Strategy Clock example
IKEA is a good example of a Company that has Improved its Perceived Value over the years.
Not many years ago, people regarded IKEA as the worst type of furniture possible.
Over the years, IKEA:
- Kept improving their Designs.
- Invested in In-Store expositors.
- Introduced very different Products.
- Offered affordable meals.
- Opened special places for Children in the Stores.
In this way, IKEA attracted families to enter their stores and see the Different Designs they had developed.
Once inside IKEA made money with Two Different Types of Product:
Day to Day Products– Low Price and Low Perceived Value:
- Kitchen Utensils.
- Mugs.
- Scissors.
- etc.
Usually, Products that Replace the broken Products that customers have in their homes.
- Every time I go Into an IKEA Store I buy Wine Glasses.
First Need / Not-Really-Necessary Products– Low Price and Medium Perceived Value:
- Affordable tables (we all have a “Lack” table).
- Cheap chairs.
- Closets that are incredibly cheap.
- etc.
Why we say Not Really Necessary Products?
- Because People have become almost “addicted” to wandering around an IKEA Store and buying something… Because they can afford it.
And that has been the secret of IKEA’s success (among many others):
- At IKEA, many People buy First Need Products as Whims.
Apple - Bowman's Strategy Clock example
As you can imagine, Apple’s products are considered to be the Best in the Market.
- iPhone is the Benchmark for mobile Phones.
- iPad is the Benchmark for Tablets.
- MacBook Pro is the Benchmark for Laptops.
- iWatch is the Benchmark for Smartwatches.
- Air-Pods are the Benchmark for Earbuds.
- Air-Pod Max are the Benchmark for Headphones.
Its products have: High Price and High Perceived Value, with no Exception.
But, this extremely good position came with a lot of effort over the years.
Not long ago, Apple products were considered to be:
- Expensive.
- Of Good Quality.
- Unique and Different in design.
- With lots of disadvantages compared to its Competitors.
- Especially incompatibility issues.
People bought Apple products because:
- They lasted more than its Competitors.
- They already had an Apple Product and its “Environment” (Software, Programs, etc).
- They were “cooler“.
Back in those days, Apple’s Product were of: High Price and Medium Perceived Value.
Over the years, Apple:
- Developed a very Good Environment that didn’t need external sources.
- Improved its Compatibility with external Software.
- Allowed Microsoft Products to be installed into their system.
- Improved the Quality of their Products.
- Released Amazing Products.
With all these Improvements, Apple’s Reputation and Perceived Value Skyrocket.
And That is why, at the time we write this, it is the largest Company in the World.
- By Market Capitalization.
Summarizing
Bowman’s Strategy Clock is a Tool that helps to understand How Products are Positioned in the Market.
To do so, it proposes to Analyze every Product based on 2 Dimensions:
- Perceived Value: How Customers Regard the Product.
- Price: The relative Price, compared to the average Market Price.
Then, Bowman’s Strategic Clock assigns each of these 2 Dimensions 3 Different Values:
- Little.
- Medium.
- High.
These divisions give 8 Possible Strategic Positionings as result:
- Low Price – Low Perceived Value.
- Low Price – Medium Perceived Value.
- Low Price – High Perceived Value.
- Medium Price – High Perceived Value.
- High Price – High Perceived Value.
- High Price – Medium Perceived Value.
- High Price – Low Perceived Value.
- Medium Price – Low Perceived Value.
FAQs
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.
When was Bowmans strategy clock invented? ›When was Bowman's strategic clock invented? Bowman's strategic clock was invented in 1996.
Who made Bowmans strategic clock? ›One notable expansion was that offered by Cliff Bowman and David Faulkner in 1996. They expanded (or rather re-divided) Porters three strategic positions to eight identifiable positions, by focusing on the value proposition to customers. They created a diagram know as the Bowmans Strategic Clock.
What is risky high margin? ›Risky high margins: Products in this segment are priced high and the customer's perceived value is just mediocre. This position is very risky and will most likely ultimately fail. Most customers will eventually look for a higher quality product in the same price range or a similar product for a lower price. Position 7.
What are the examples of time-based strategies? ›Examples of time-based strategies include reductions in any three of the following: planning time, product/service design time, processing time, changeover time, delivery time, or response time for complaints.
What are the five time-based strategies? ›Philip Carter, Steven Melnyk, and Robert Handfield identified seven process strategies for implementing time-based competition. These include: system simplification, system integration, standardization, parallel activities, variance control, automation and excess resources.
What is the oldest method of keeping time? ›One of the earliest known timekeeping methods – dating back thousands of years – involved placing a stick upright in the ground and keeping track of its moving shadow as the day progressed. This method evolved into the sundial, or shadow clock, with markers along the shadow's path dividing the day into segments.
Who invented strategy? ›Perhaps the military figure with the most impact on strategy is Carl von Clausewitz (1780-1831). Clausewitz was a Prussian General whose work entitled, On War, is probably the most famous treatise ever on the subject. Clausewitz focused on two questions: What is war, and what purpose does it serve?
When was strategy created? ›Greek origins
The term strategy is derived indirectly from the Classic and Byzantine (330 A.D.) Greek strategos, which means general. Historians credit the Greeks for this term, though no Greek ever used the word.
Igor Ansoff (1918-2002) was the father of modern strategic thinking. When Gary Hamel referred to the origins of corporate strategy he paid Ansoff an indirect compliment: “Strategy didn't start with Igor Ansoff, neither did it start with Machiavelli,” he wrote.
Who is the father of strategic? ›
Igor Ansoff, the father of strategic management.
What do time based strategies focus on? ›Time-Based Strategy: Strategy that focuses on reduction of time needed to accomplish tasks.
What is the riskiest growth strategy? ›Diversification is the riskiest strategy. It involves the marketing, by the company, of completely new products and services on a completely unknown market.
What is hybrid strategy? ›The hybrid strategy combines both low-cost and differentiation strategies. Open in viewer. A hybrid strategy is considered an emerging and novel concept that leads to superior performance than pure strategies.
What is strategic drift? ›Strategic drift occurs when the strategy pursued by a business no longer fits with the environment around it. What may have been appropriate at one point is no longer suitable as conditions have changed.
What is time-based competition and give example? ›Time-based competition is a demonstration of the power of time management, and how companies can use it to gain a competitive advantage. For companies that make best use of time as they respond and adapt to changes in the market and other possible conditions and obstacles, they will gain an adaptive advantage.
What is an example of an effective time management strategy? ›Record your daily routine
This time management strategy will make you clear to find out which are the activities that you are wasting your time on. You can start by tracking your activities at work using time tracking apps and productivity apps.
- Plan Ahead. Planning ahead allows you to mentally prepare for anything that could come your way. ...
- Prioritize Tasks. ...
- Understand the Role Energy Plays in Productivity. ...
- Use Technology to Automate Certain Tasks.
A clock is anything that does a regular, repeated action. You count the number of times the action repeats, and that tells you how much time has passed. The sun rising and setting, a pendulum swinging back and forth, a light wave jiggling electrons in an atom: all of these have been used as clocks.
How can you tell time without a clock? ›Look to the stars
To locate the North Star, trace an imaginary line extending from the two outermost stars in the bowl of the Big Dipper. This line acts as the “hour hand” of the star clock, which makes a full rotation over the span of 24 hours in a counter-clockwise motion.
What are the 3 types of strategy? ›
- Business strategy.
- Operational strategy.
- Transformational strategy.
A strategy is a general plan or set of plans intended to achieve something, especially over a long period. The group hope to agree a strategy for policing the area.
How do you explain a strategy? ›Strategy is where you will focus your efforts to achieve your goals, and how you will succeed—or, “where to play and how to win.” It defines a specific course of action that will take you from where you are now to where you want to be.
What is the main purpose of strategy? ›The purpose of strategic planning is to set overall goals for your business and to develop a plan to achieve them. It involves stepping back from your day-to-day operations and asking where your business is headed and what its priorities should be.
Why is a strategy important? ›Strategy help us define our business, gives it a set of values, and gives it purpose. It helps us understand what success actually looks like. It provides a roadmap for our business, shows us our destination and identifies useful stopping points along the way.
What are the five strategic elements? ›These five elements of strategy include Arenas, Differentiators, Vehicles, Staging, and Economic Logic. This model was developed by strategy researchers, Donald Hambrick and James Fredrickson.
Who is the best strategist in history? ›- Sun Tzu. Sun Tzu (544-496 BCE) was a Chinese general, military strategist, writer, and philosopher who lived in the Eastern Zhou period of ancient China. ...
- Genghis Khan. ...
- Alexander the Great. ...
- Hannibal. ...
- Scipio Africanus. ...
- Napoleon. ...
- Carl von Clausewitz. ...
- Erwin “Desert Fox” Rommel.
Strategy generally involves setting goals and priorities, determining actions to achieve the goals, and mobilizing resources to execute the actions. A strategy describes how the ends (goals) will be achieved by the means (resources).
Who is called a strategic leader? ›other classifications of leadership. Most large-scale organizations have three defined leadership classifications: strategic, organizational and production/action-orientated. Strategic leadership consists of the top-level executives responsible for the broad, long-term strategic direction of an organization.
What is strategic theory? ›In essence, strategic theory is the study of correlations between ends and means, including the use, or threat of use, of armed force as a conscious choice of political actors who are intent on rationally pursuing their objectives.
Where did strategy come from? ›
The term “strategy” is derived indirectly from the Classic and Byzantine (330 A.D.) Greek “strategos,” which means “general.” While the term is credited to the Greeks, no Greek ever used the word.
What are the 6 approaches for strategy formulation in OM? ›Approaches to Strategy Formulation – 6 Main Approaches: Intuition, Disjointed Incrementalism, Entrepreneurial Approach, Key-Factors Approach and a Few Others.
How do you make time strategic thinking? ›- Make strategic thinking a group effort. ...
- Stay home. ...
- Team brainstorming. ...
- Make your intentions known. ...
- Change the scenery. ...
- Ignoring strategy simply isn't strategic.
Strategic planning typically represents mid- to long-term goals with a life span of three to five years, though it can go longer. This is different than business planning, which typically focuses on short-term, tactical goals, such as how a budget is divided up.
What is strategic time frame? ›Strategic planning is essentially about planning for the future in the medium and long term. The timeframe for strategic plans is often 3 - 5 years. Strategic planning for timeframe over 5 years can be problematical because it is difficult to see that far into the future.
What is strategy by Michael Potter? ›However, Michael Porter defines strategy as competitive position, “deliberately choosing a different set of activities to deliver a unique mix of value.” In other words, you need to understand your competitors and the market you've chosen to determine how your business should react.
What is strategy according to Peter Drucker? ›Peter Drucker's definition of strategy: “A pattern of activities that seek to achieve the objectives of the organization and adapt its scope, resources and operations to environmental changes in the long term.”
What is strategic planning process with example? ›Strategic planning is the development of a specific, measurable goal or (more commonly) a set of goals that deliver the desired results for your organization. The strategic plan can be used by many different teams across the organization to address the varying cadence of achieving business goals.
What are the 7 steps of strategic planning? ›- Step 1: Environmental Scan. ...
- Step 2: Internal Analysis. ...
- Step 3: Strategic Direction. ...
- Step 4: Develop Goals and Objectives. ...
- Step 5: Define Metrics, Set Timelines, and Track Progress. ...
- Step 6: Write and Publish a Strategic Plan. ...
- Step 7: Plan for Implementation and the Future.
- Environmental Scanning. Environmental scanning is the process of gathering, organizing and analyzing information. ...
- Strategy Formulation. ...
- Strategy Implementation. ...
- Strategy Evaluation.
What are the stages of strategic? ›
The five stages of the process are goal-setting, analysis, strategy formation, strategy implementation and strategy monitoring.
How long should a strategy last? ›Leading businesses and industries make use of five- to 10-year strategic plans as a key resource for sustaining a company's vision, market-share growth, brand equity, employee and product/service effectiveness, profitability, and stakeholder satisfaction.
What are the 3 types of strategic fit? ›Strategic fit can be divided into various sub-fits e.g. financial strategic fit, market strategic fit, technology strategic fit. By achieving high degree of strategic fit, managers can exploit opportunities of the organization and reduce negative impact of threats.
What is the Tiffany strategy? ›Tiffany & Co has focused on commitment to its customers for some time now. So, its marketing strategy focuses on digital media, and subsequently, all its products are available online. Of course, as a luxury brand, they face a significant challenge in selling their products due to their high price.
What is the basic concept of strategy? ›Strategy is an action that managers take to attain one or more of the organization's goals. Strategy can also be defined as “A general direction set for the company and its various components to achieve a desired state in the future. Strategy results from the detailed strategic planning process”.
What are the types of strategies? ›- Structuralist. ...
- Differentiation. ...
- Price-skimming. ...
- Acquisition. ...
- Growth. ...
- Focus. ...
- Cross-selling. ...
- Operational.