Bowman Strategy

Topics: Porter generic strategies, Strategic management, Marketing Pages: 7 (1810 words) Published: June 24, 2013
1.0 Introduction
Strategy is a long term directions for companies. Bennett (1996, cited by Cousins 2000) describes strategy as: “The word strategy is used to describe the direction that the organisation chooses to follow in order to fulfil its mission”. Today, strategies are vital for businesses, in many cases it helps to achieve a competitive advantage. Increasing competition in most sectors and technological development has led to accelerated changes in the global economy. In order to meet the market needs, strategies encourage and enable the adaptation of companies in a changing environment (Tribe, 2010). The aim of the report is to conduct a research on Bowman's Strategy Clock which will demonstrate a rational, reflective and critical evaluation of the concept. To do so, the report is going to be divided in three parts. The first or the report part is going to give an overview of the Bowman’s strategy with its background. The second part will analyse the model and its different strategies by using example from companies. Then some authors’ opinions about the model will be analysed.

2.0 Bowman's Strategy Clock
2.1 Strategy Overview
In 1980 Michael Porter published his seminal book wherein he identified three generic strategies for a business to gain competitive advantage: cost leadership, product differentiation and market segmentation (Johnson et al., 2008). Basically, Porter analysed that business compete either on price (cost), on perceived value (differentiation), or by focusing on a very precise customer (market segmentation).

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Source: Eldring (2009)
With his model, Porter (1980- cited in Eldring, 2009) explained that a company must choose between one of the three generic strategies otherwise it will be “stuck in the middle” and suffer from below-average performance.

In 1996, Cliff Bowman and David Faulkner developed Bowman's Strategy Clock Looking at Porter's Generic strategies in a different way. This model extends Porter's three strategic positions to eight. Figure 1 below, represents Bowman's eight different strategies that are identified by varying levels of price and value. Figure 2: Bowman’s Strategy Clock

Source: Johnson et al (2008)

2.2 Model explanation
Bowman strategy is a competitive strategy. Competitive strategies are tools that businesses use to achieve competitive advantages (Johnson et al. 2005). The Bowman’s clock strategy is a more sophisticated approach, which recognizes and deals with certain criticisms of Porter’s model (Tiwari, 2009). For instance, as it has already been said, according to Porter generic model, a business has to choose one generic strategy are it means that the company is place in the middle which means being “dead”. However what Bowman believes is that a business can be both low cost and differentiated and still be successful over the long term, such as the companies Swatch, IKEA, Sainsbury and many others. In Bowman model, these companies are situated at the hybrid position, also known as combined strategy (Dobson et al. 2004). Figure 3 demonstrates that there are eight approaches on the clock in total. Meanwhile, these strategic positions can be grouped into three- risk strategies, low price strategies and differentiation strategies (Thomson & Banden-Fuller 2010, 184).

Figure 3: Bowman’s Strategy Clock companies examples

Source: (Thomson and Baden-Fuller, 2010: 184)

To have a clear understanding of the eight different positions of Bowman’s Strategy clock, the author has decided to illustrate them with some companies’ examples.

2.2.1 Low Price Strategies
Number 1 and 2 (No frills and Low price) on the clock are organisations who are going to position themselves in a part of the market which is looking for reasonable prices. The examples given are Ryanair and Easyjet. Indeed these two companies have managed to cut their costs by only focusing on their core service (every extras have to be paid by customers), also by using online...

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