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Bowman's Strategic Clock

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Business Studies

How do businesses effectively position their products? One way to do this is by using Bowman's Strategic Clock. Bowman's theory includes a clock-shaped model which consists of eight different positions. Let's take a look.

Bowman's Strategic Clock theory

Bowman’s Strategic Clock is a strategic tool that designs a marketing strategy to analyse a company’s competitive position.

It aims to help with determining how a product should be positioned to give it the most competitive position in the market. It consists of eight positions across the clock indicating a different market strategy. It was invented by Cliff Bowman and David Faulkner and first published in 1997 in a paper called “Competitive and Corporate Strategy”.

Bowman's Strategic Clock Method

Firstly, you should think about the two dimensions: value and price of a product or service. These method will guide you and help you to arrive at one of eight positions on the clock. See Figure 1 below.

Bowman's strategic clock, How to use Bowman's strategic clock, StudySmarterFigure 1. Bowman’s Strategic Clock, StudySmarter

1. Low Price and Low Value Added

In this strategy, the price and value of a product or service is very low. It is probably the least competitive strategy in Bowman’s Strategic Clock.

Poundland sells low-valued products at very low prices, usually at £1 or less.

2. Low Price

This strategy is about providing customers with a product or service at the price lower than the price of the competition. Usually, businesses using this strategy focus not on quality, but on quantity. They aim to minimise the production costs in order to sell as many units as possible at the lowest price.

Ryanair provides customers with flights which are theoretically a high-valued service. However, Ryanair cuts all the possible costs in order to offer the lowest price.

3. Hybrid

This strategy combines low price and product differentiation. Companies using this strategy aim to make their product or service highly valued in the market and in the eyes of their customers. However, the price of the product is low and therefore highly competitive.

Ikea offers a variety of highly valued products at reasonable prices.

4. Differentiation

Companies following this strategy try to make their product or service different from the products offered by their competition. Typically they offer the same product or service, but with some unique features.

Adidas offers products that are the same as their competitors (sports clothing, shoes and accessories). However, their products are unique as they have a different, specific design which is not offered by any of the competitors.

5. Focused differentiation

This strategy combines high value and high price. Here companies produce distinguished and high valued products or services and sell them at the highest price possible. Businesses using this strategy usually make high profits, but they have to put in a lot of effort to make it work successfully.

Chanel offers highly valued and distinguished products. Their products are high-priced and their customers are willing to pay much more than their competitors.

6. Risky High Margins

This strategy combines high price and low value. Here companies offer a low valued product or service, but sell it at the highest price possible. It is a fairly risky strategy that is usually used by businesses with a strong brand name.

Some gyms tend to offer expensive membership even though they do not offer much more than their competitors.

7. Monopoly Pricing

In this market, there is only one business which controls a product or service and its price. There is no competition, but companies using monopoly pricing should keep an eye on the market since all monopolies come to an end.

Microsoft offers a service that is the only option for customers looking for an operating system.

8. Loss of Market Share

This is a strategy for companies exiting a market or being in decline. It is used when companies lose their customers, become less profitable and therefore are forced to lower the prices of their products.

Blackberry used to offer smartphones, but unfortunately, other smartphone producers defeated the company and as result, Blackberry lost its market share.

What are advantages and disadvantages of the Bowman’s Strategic Clock?

AdvantagesDisadvantages
It is simple and comprehensive.Its strategies can be blurred.
It offers a variety of starting points to examine strategy.It tends to be focused on competitive marketplaces.

Bowman's Strategic Clock - Key takeaways

  • Bowman’s Strategic Clock is a strategic tool that designs a marketing strategy to analyse a company’s competitive position.

  • It examines the value and price of a product or service and determines an appropriate strategy.

  • There are eight positions on the clock: low price and value added, low price, hybrid, differentiation, focused differentiation, risky high margins, monopoly pricing, loss of market share.

  • Bowman’s Strategic Clock tends to be focused on competitive market places and blurry the strategies.

Bowman's Strategic Clock

You should think about the value and price of a product or service and determine an appropriate strategy on the clock.

It was invented by Cliff Bowman and David Faulkner.

It was first published in 1997.

It is used to design a marketing strategy to analyze a company’s competitive position.

Final Bowman's Strategic Clock Quiz

Question

What is Bowman’s Strategy Clock?

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Answer

It is a strategic tool which designs a marketing strategy to analyze a company’s competitive position.

Show question

Question

What does the Bowman’s Strategic Block help by?


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Answer

It helps to determine how a product should be positioned to give it the most competitive position in the market.

Show question

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How to use the Bowman’s Strategy Clock?


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Answer

You should think about the two dimensions: value and price of a product or service. They will help you to arrive at an appropriate position on the clock.

Show question

Question

What are the eight strategies of the Bowman’s Strategy Clock?


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Answer

Low price and value added, low price, hybrid, differentiation, focused differentiation, risky high margins, monopoly pricing, loss of market share.

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Question

Give an example of a business using a hybrid strategy.


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Answer

Ikea, Wilko.

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Question

Which of these companies use a differentiation strategy?


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Answer

Adidas

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Question

List the advantages of the Bowman’s Strategic Clock.


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Answer

It is simple and comprehensive and offers a variety of starting points to examine strategy.

Show question

Question

List the disadvantages of the Bowman’s Strategic Clock.


Show answer

Answer

Its strategies can be blurred and focus on competitive marketplaces.

Show question

Question

What is the least competitive strategy on the Bowman's Strategic Clock?

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Answer

Low Price and Low Value Added 

Show question

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What are the two aspects combined in the hybrid strategy?

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Answer

This strategy combines low price and product differentiation.

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Question

What is the difference between the 'Low Price and Low Value Added' and 'Low Price' startegy?

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Answer

In the Low Price and Low Value Added the price and value of a product or service is very low wheras in the Low Price the price is low but the value is not.

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What are the two aspects combined in the Focused Differentiation strategy?

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Answer

This strategy combines high value and high price. 

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What are the two aspects combined in the Risky High Margins strategy?

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Answer

This strategy combines high price and low value. 

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Question

Do businesses using the Monopoly Pricing strategy face any competition?

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Answer

No

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Question

What companies use the Loss of Market Share strategy?

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Answer

This is a strategy for companies exiting a market or being in decline. 

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How many strategies does Bowman's strategic clock include?

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Answer

8

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Question

Companies following ___ strategy try to make their product or service different from the products offered by their competition. Typically they offer the same product or service, but with some unique features.


Show answer

Answer

differentiation

Show question

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This strategy combines high price and low value. Here companies offer a low valued product or service but sell it at the highest price possible. What strategy is it?


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Answer

Risky High Margins

Show question

Question

Which strategy is on Bowman's Strategy Clock is the least competitive?

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Answer

Low Price and Low Value Added 

Show question

Question

Bowman's Strategic Clock aims to help with determining how a product should be positioned to give it the most ___ position in the market.

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Answer

competitive 

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Question

What are the two dimensions in Bowman's Strategic Clock?

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Answer

value and price

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Question

What strategy is used by IKEA?

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Answer

Hybrid

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Question

The hybrid strategy combines low price and high value.

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Answer

False

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Question

Bowman’s Strategic Clock is a strategic tool that designs a ___ strategy to analyse a company’s competitive position. 


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Answer

marketing 

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Question

Imagine a company loses its customers, becomes less profitable and therefore is forced to lower the prices of its products. What strategy does it use?


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Answer

Loss of Market Share

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Question

Businesses using the low price strategy aim to minimise their production costs in order to sell as many units as possible at the lowest price.

Show answer

Answer

True

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Question

In this market, there is only one business which controls a product or service and its price. What strategy is it?


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Answer

Monopoly Pricing

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