Bowman's Strategy Clock
Bowman's Strategy Clock is a strategic tool designed to help businesses formulate competitive marketing strategies by analyzing their market position in relation to price and perceived value. This model, introduced by Cliff Bowman and David Faulkner in 1996, presents a circular diagram divided into eight distinct strategic options, each representing different combinations of price and perceived value. The clock's x-axis indicates price levels, while the y-axis reflects the perceived value of the product or service being offered.
The strategies range from low-price, low-value offerings, often seen in discount retailing, to high-price, high-value niche products targeting affluent consumers. For example, businesses like Walmart exemplify the low-price strategy, while luxury brands such as Rolex represent focused differentiation. The clock also highlights potentially risky approaches, such as high-margin products without added value, which may only yield short-term success. Overall, Bowman's Strategy Clock provides a comprehensive framework for companies to assess their competitive advantage and identify effective market positioning strategies in a dynamic business environment.
On this Page
- Overview
- Position 1: Low Price/Low Value
- Position 2: Low Price
- Position 3: Hybrid (Moderate Price/Moderate Differentiation)
- Position 4: Differentiation
- Position 5: Focused Differentiation
- Position 6: Risky High Margins (Increased Price/Standard Product)
- Position 7: Monopoly Share (High Price/Lower Value)
- Position 8: Loss of Market Share (Low Value/Standard Price)
- Bibliography
Subject Terms
Bowman's Strategy Clock
Bowman's Strategic Clock is a tool used by businesses to develop a competitive marketing strategy. The clock is a circular diagram with eight positions arranged like a standard clock face and set on a perpendicular line graph with two dimensions: the x-axis representing price and the y-axis representing perceived value. Each "hour" of the clock corresponds to a certain level of price versus perceived value. Companies use the tool to analyze their position in the market and determine which strategy to employ to gain an edge over the competition.
Overview
Bowman's Strategic Clock was developed in 1996 by business professors Cliff Bowman and David Faulkner. Their model was based on a 1980 book by economic strategist Michael Porter, who categorized business competition into three elements: cost leadership, product differentiation, and market segmentation. Bowman and Faulkner's clock expanded on these ideas and created eight strategic options instead of three.
Position 1: Low Price/Low Value
This strategy is set at the lower left of the clock at the "seven-thirty" position. It represents a bargain basement approach, such as a dollar store selling generic goods perceived as inferior quality at very low prices. To compete at this level, a company must sell a large volume of products.
Position 2: Low Price
Set at "nine o'clock," this strategy represents a business strategy of driving down costs to a minimum and selling a high volume of goods to make a profit. Retailers such as Walmart fall into this category.
Position 3: Hybrid (Moderate Price/Moderate Differentiation)
Set at the upper left, this strategy focuses on offering affordable prices for items perceived as having a higher value than their low-price competitors. This option is often used by small businesses that cannot price items as low as their larger competitors and cannot afford to offer luxury goods.
Position 4: Differentiation
Set at "twelve o'clock," this strategy offers high-value items perceived as having superior quality compared to competitors. Brand management is important to set the product apart from its competitors and convince consumers to pay a higher price.
Position 5: Focused Differentiation
Set at the upper right, this strategy sells products at the highest price levels and targets consumers willing to pay premium prices for perceived high value. Designer goods like Rolex watches and luxury cars like Lexus and Mercedes-Benz fall into this category.
Position 6: Risky High Margins (Increased Price/Standard Product)
Set at "three o'clock," this strategy markets products at higher prices without offering added value. This strategy can be profitable only in the short term and only if consumers are willing to accept the higher prices.
Position 7: Monopoly Share (High Price/Lower Value)
Set at the lower right, this strategy occurs if only one business is offering a product, and consumers have no other choice. Monopolies are unsustainable in a free market.
Position 8: Loss of Market Share (Low Value/Standard Price)
Set at "six o'clock," this strategy markets low-value, inferior products without offering the incentive of lower prices to entice consumers. Like positions six and seven, this strategy works only in the short term and cannot be maintained.
Bibliography
"Bowman's Strategy Clock." Marketing Teacher, www.marketingteacher.com/bowmans-strategy-clock. Accessed 29 Oct. 2024.
"Bowman's Strategy Clock (Strategic Positioning)." Tutor2u, 18 Feb. 2018, www.tutor2u.net/business/reference/strategic-positioning-bowmans-strategy-clock. Accessed 29 Oct. 2024.
Bridges, Mark. "Crush Your Competition with Bowman's Strategy Clock." Medium, 23 June 2024, mark-bridges.medium.com/crush-your-competition-with-bowmans-strategy-clock-9e0482974ac8. Accessed 29 Oct. 2024.
Gordon, J. Mance. "Bowman's Clock." The Business Professor, 21 Apr. 2024, thebusinessprofessor.com/bowmans-clock. Accessed 29 Oct. 2024.
Mind Tools Content Team. "Bowman's Strategy Clock: Making Sense of Eight Competitive Positions." Mind Tools, www.mindtools.com/a2rq300/bowmans-strategy-clock. Accessed 29 Oct. 2024.