Mapping Your Competitive Position
A simple chart shows how much a customer will pay for a perceived benefit. This is more than a marketing aid, it’s a powerful tool for competitive strategy. by Richard A. D’Aveni
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That’s all that separated the launch of Apple’s revolutionary iPhone, on June 29, 2007, and Motorola’s nextgeneration Razr2 (pronounced Razr Squared) cellular telephone, on August 24. Before unveiling the successor to the Razr, which PC World magazine in 2005 ranked 12th on a list of the 50 greatest gadgets of the past 50 years, Motorola’s top management team was more worried than usual. With sales of the American communication giant’s other cellular telephones tapering off, the company’s fate rested squarely on the Razr2. Moreover, senior executives like chairman and CEO Edward J. Zander wondered if the iPhone had changed
IGHT WEEKS.
YO U R
Mapping Competitive Position
|
110 Harvard Business Review
November 2007
|
hbr.org
Ian Whadcock
hbr.org
|
November 2007
|
Harvard Business Review 111
Mapping Your Competitive Position
the competitive dynamics of the market in ways they hadn’t foreseen. Had the iPhone created a new niche or would it take the Razr2 head-on? How much extra could they charge for the Razr2’s new features? Should Motorola play up the Razr2’s noise-filtering technology, which it had patented? The executives couldn’t wait for the results of focus group sessions or sample surveys. They needed a fast, yet reliable way of capturing changes that were emerging in the market so they could finalize strategy quickly. Like Motorola, most companies have to build fresh competitive advantages and destroy others’ advantages faster than they used to. As innovation pervades the value chain, they must migrate quickly from one competitive position to another, creating new ones, depreciating old ones, and
sumer electronics, where the number of features makes comparisons complicated; in markets like computer hardware, where technologies and
E
That’s all that separated the launch of Apple’s revolutionary iPhone, on June 29, 2007, and Motorola’s nextgeneration Razr2 (pronounced Razr Squared) cellular telephone, on August 24. Before unveiling the successor to the Razr, which PC World magazine in 2005 ranked 12th on a list of the 50 greatest gadgets of the past 50 years, Motorola’s top management team was more worried than usual. With sales of the American communication giant’s other cellular telephones tapering off, the company’s fate rested squarely on the Razr2. Moreover, senior executives like chairman and CEO Edward J. Zander wondered if the iPhone had changed
IGHT WEEKS.
YO U R
Mapping Competitive Position
|
110 Harvard Business Review
November 2007
|
hbr.org
Ian Whadcock
hbr.org
|
November 2007
|
Harvard Business Review 111
Mapping Your Competitive Position
the competitive dynamics of the market in ways they hadn’t foreseen. Had the iPhone created a new niche or would it take the Razr2 head-on? How much extra could they charge for the Razr2’s new features? Should Motorola play up the Razr2’s noise-filtering technology, which it had patented? The executives couldn’t wait for the results of focus group sessions or sample surveys. They needed a fast, yet reliable way of capturing changes that were emerging in the market so they could finalize strategy quickly. Like Motorola, most companies have to build fresh competitive advantages and destroy others’ advantages faster than they used to. As innovation pervades the value chain, they must migrate quickly from one competitive position to another, creating new ones, depreciating old ones, and
sumer electronics, where the number of features makes comparisons complicated; in markets like computer hardware, where technologies and