Companies can get so focused on achieving efficiency that they let strategy and operations converge. Why is it so hard to tell the difference and what having a real strategy means for a business? Is strategy and operational effectiveness the same thing?
Operational effectiveness is not strategy because strategy is positioning the brand to stand out from competitors, while operational effectiveness is competing internally to improve processes and reduce costs. Both work in different ways and are necessary for the business’s survival.
A strategy is a long-term plan that outlines how an organization will achieve its objectives. Operational effectiveness can help an organization meet short-term goals, but it is not a strategy in and of itself.
A good example of how operational effectiveness can help an organization meet short-term goals is during a crisis. If an organization has effective processes in place for responding to crises, then they can minimize the impact of the crisis on their overall business operation. This allows them to focus on their core competencies and continue to operate as normal. However, if an organization does not have effective processes in place, then the crisis could have a significant impact on their business operation.
Both operational effectiveness and strategic positioning are important when a business is trying to excel in a market. However, managers often neglect strategic positioning and confuse it with operational effectiveness. The result? Success is seldom sustainable. Let’s look at what both these terms mean and what differentiates them.
What is Operational Effectiveness?
Every business owner hopes to drive revenue from their business. This becomes impossible when your operations aren’t effective. Effective operations mean doing better today than you did yesterday.
For example, if an organization has effective customer service processes in place, then customers are likely to have a positive experience when contacting the company about issues or questions. This reduces the number of complaints that customers may have and increases loyalty towards the company. In addition, if an organization has effective customer service processes in place, they are less likely to lose customers due to poor service quality.
Its four components are:
- Controlling and reviewing team performances
- Tracking and measuring processes
- Improving processes, and
- Automating processes
You can look at businesses like yours and see how they manage their processes to be efficient. However, keep in mind that you shouldn’t be copying everything your competitors do as it is because each business and its dynamics differ from the other. What may work for their organizational culture isn’t necessarily going to work for you.
What is Strategic Positioning?
While operational effectiveness is important, it should not be confused with strategy. A strategy outlines how an organisation will achieve its objectives over time while operational effectiveness helps organizations meet current goals and objectives.
Creating a strategy or a strategic positioning is simply having a powerful competitive advantage that makes you different from your competitors. Now, your brand will still have positioning in the market even if you don’t actively work on it. However, you should be tactful about it and make conscious choices to be perceived as you would by your customers.
Many companies make the sad mistake of copying others as is without introducing their unique value proposition. The result? A brand that soon turns to failure.
As a business, you need to research to determine what your target customer needs and then position the product to offer exactly that.
Operational Effectiveness Vs. Strategic Positioning
Many people take strategy in its literal terms of creating an execution plan; hence, it is often confused with a strategy to increase operational effectiveness.
Strategic advantage means having a product or service that gives you an edge over your competitors.
Let’s take a glance on the major components:
| Operational Effectiveness | Strategic Positioning |
| Establishing and extending best practices | Developing a unique value proposition |
| Improving existing processes continuously | Delivering extra value for customers |
| Resource evaluation & optimization | Market research and positioning |
How to Create Strategic Positioning?
Strategic positioning is the development of a market position that allows a company to differentiate its products or services in order to gain a competitive advantage. It involves creating an offer that is unique and appealing to customers in your target market.
Positioning requires an understanding of both the needs of your target market and the strengths of your company. Once you have this information, you can develop a positioning statement which articulates how you plan to occupy a valuable and differentiated space in the market.
It’s never too late to think about your strategic positioning and what you want your product or service to be known for. We’ve curated a step-by-step guide to help you kick off the process.
Do a competitive analysis
The first step is understanding what your competitors are like and what they do to stand out in the market and retain customers through their value proposition. This will be the base for developing your competitive advantage and will help you determine things like:
- Consumer likes and dislikes
- Top competition and their influence on each other
- Industry performance
- Room for new additions
- Your position against top competitors
These data points will help you determine where your product or services lie and what you can do to bring it to the top.
Map the market
Next, visualize your position against the competitors in the market on a position or a market map. This visual representation will help you see consumer likes and dislikes, your competitor’s positioning, and potential opportunities in the market.
Empowered with this knowledge, you can create a value proposition that sets you apart from the existing businesses.
The usual map is plotted with two values from high to low. Usually, these are price and quality, but you can benefit from plotting other metrics like the following:
- Performance vs. price
- Tastiness vs. healthiness
- Quality vs. price
- Price vs. practicality and functionality
- Design vs. safety
There are different tools in the market that you can utilize to create your position maps, including the Centrality-Distinctiveness (C-D) maps. The C-D maps help businesses combine brand positioning and business performance metrics on one map for a more comprehensive view of progress.
Draft your positioning statement
After doing the market research and having a good idea of how your brand should be perceived, you can now draft your positioning statement. A positioning statement simply contains details about what makes you different from the existing competitors in the market and the target audience needs.
You will create this after you’ve determined the product’s value proposition and benefits for the target market.
The following tips will help you make an excellent positioning statement:
- Focus on uniqueness
- Stay short and crisp with the words
- Highlight why you’re different
- Include your unique promise to the customer
Prioritize your audience
At the end of the day, the one thing that can make or break audiences is the target audience. The time you want to research is your target audience. Research tools like surveys and focus groups can help you determine your customers’ inclinations.
If you need to dive deep into market research, then a tool such as CrawlQ can be hugely helpful. It helps you think about your ideal customers and what problems they’re having.
Use customer feedback as a key tool to guide your positioning. What about your current positioning would your customers like to see changed or upgraded?
The feedback that comes directly from the audience can lead to positioning that is a hit with your target audience.
Lock down market positioning strategies
Now that the legwork is done, and you’ve determined your positioning in the market, you’ll need to decide what marketing strategies you want to use. Different brands are perceived differently. For example, Gucci is known to be highly-priced and associated with high brand value as well.
This didn’t happen on its own; a team of marketing experts consistently positioned the brand to be high-end. They used a number of market positioning strategies to create this perception. Let’s walk you through some of the most effective strategies for positioning your brand:
Price
This will define the buying segment your product or service lies in, and hence, it is a critical factor in positioning your brand in the market. Customers still associate quality with price, and you must be very careful using this strategy alone to market your product.
If low pricing becomes your only strategic advantage, then you are destined to fail because there will always be a competitor who will offer the same product or service at a lower cost. Ultimately, you will lose customer loyalty.
Quality perception
Both pricing and quality perception in the market work side by side. Now, quality is subjective to the customers, and you will have to work hard to determine which segment you want to target for quality perception.
A heavy and powerful gaming laptop can be pretty cumbersome for a corporate professional who wants something light to carry around. At the same time, the very same laptop can be the best in the market for a seasoned gamer.
So you have to understand what segment of the target audience you want to focus on and what aspect of the product you want to highlight for that segment.
Influencer Marketing
Taking the world by storm and creating huge shifts in strategy when it comes to marketing products, influencer marketing has given brands an excellent tool for shaping their organization’s perceptions of their target consumers. Since the endorsement comes from a trusted individual, people are more likely to respond to it favorably.
The key here is to choose influencers that are in line with your brand values. If you choose the wrong influencers, you may end up re-positioning your brand in a way you didn’t want to.
When you choose an influencer, use the tools available in the market to gauge their engagement levels in the audience segment you want to target. Give them a brief on the campaign you want to run and what value proposition you would like to highlight.
Experts as thought leaders
Many brands use thought leadership as a part of their content strategy to promote their brand. They position their experts as thought leaders in the industry who introduce innovative ideas and groundbreaking products or services.
This can be done via the creation of authoritative content such as blog posts. This is again where a tool such as CrawlQ can be highly effective, as well as helping you define your target audience it can also help you write content that appeals to them, setting you up as experts in your field.
Distribution tactics
You can’t term an item luxury if it’s readily available at a convenience or drug store. The places where your product is available will say a lot about it and who it is for. Take makeup brands as an example.
Maybelline is a drug store brand that is nicely priced and affordable for everyone. However, you won’t find Laura Mercier products in places other than high-end makeup stores like the brand’s own stores or Sephora.
Competition
The most commonly used factor in developing strategic positioning must be a comparison with the competition.
You can take a look at what your competitors are offering and create a value proposition that differentiates you from them. This way, you will have a robust foundation for capturing the target market.
Some organizations also use competitors as a reference to create a more similar value proposition.
Product Use
Positioning can be based on the actual use or application of the product. For example, protein powders can target fitness-conscious people who want to amp up their workouts. At the same time, they can be targeted toward people actively looking to replace a meal with something quick and beneficial.
Tracking the effectiveness of the marketing strategies
Once you’ve established positioning based on your chosen strategies, you can measure the effectiveness of each in influencing your audience in the following three ways:
Monitor Media
Use monitoring tactics like social monitoring to see how well the audience responds to your content and, more importantly, your thought leadership content.
You can see this by looking at the frequency of your company’s mentions related to the topic and also analyzing how often you were mentioned compared to your competitors.
Analyze Audience
Once you see good traction in your audience, it is no time to analyze your audience. Use social monitoring tools to look at the interests and inclinations of the people that follow your brand and engage with it.
This will help you determine whether you have successfully changed the way you are perceived and whether you are now marketing to the right target audience segment.
Measure Brand Salience
Your brand’s salience is the degree to which your company is remembered when a value proposition is brought up. A great way to determine this is to hold a focus group and ask your consumers directly. We instantly think of McDonald’s when fast food comes to mind because McDonald’s has a very high brand salience.
Good strategic positioning can change the future of the brand for the better. Brands on the brink of extinction can be revived with proper re-positioning.
Frequently Asked Questions
Is strategy more important than operational effectiveness?
Both are equally important for the survival of a business. Strategy is important to ensure sustainability. Otherwise, operational effectiveness alone can’t keep the business in profit for long. Our tips for creating a good positioning can help you get started.
Can a business operate without a strategy?
A company or brand can definitely operate without a strategy. However, it won’t survive for long and will almost always be at a loss. Competitors will have a strategy and a better positioning in the market, and this is what will hurt a company without any brand messaging or differentiating factor.
Why is strategy implementation difficult?
Strategy implementation fails because a properly defined implementation plan involves all the stakeholders and properly communicates what needs to be achieved. The plan must have achievable and agreed-on milestones that can be tracked along the way.
How does risk effect business operation?
There are a number of ways that risk can effect business operations, from the potential for financial loss to the impact of reputational damage.
While some risks are inherent in any business venture, others may be specific to certain industries or organizational structures. Managing risk effectively is essential to ensuring the smooth running of any business.
One of the most significant ways in which risk can effect business operations is through the potential for financial loss. This can occur if, for example, a company incurs unexpected costs or fails to generate enough revenue to cover its expenses. Financial losses can also occur as a result of fraudulent activity or cybercrime.
Another way in which risk can impact business operations is through the potential for reputational damage. This can happen if a company is involved in a scandal or suffers a data breach, for example. Reputational damage can lead to a loss of customers and revenue, as well as an increase in costs associated with negative publicity and damage control.
In order to manage risk effectively, businesses need to have robust systems and processes in place. They should also regularly review and update their risk management plans to ensure that they are prepared for any eventuality.
Final Thoughts
Operational effectiveness and strategy are two very different concepts. Operational effectiveness is the efficient and effective use of resources to produce desired outcomes. It helps an organization accomplish its goals by improving processes, systems, and practices. Operational effectiveness is not strategy because it does not involve making choices about how to create unique value or how to compete in a market.
Strategic positioning involves creating a unique value proposition that meets the needs of targeted customers better than competitors do. To achieve this goal, organizations must make decisions about which markets to enter or exit, what products or services to offer, what price points will maximize profitability, and where to allocate precious resources.
However, they are both necessary to ensure steady and increasing revenue in an organization. Without a strategic vision and positioning in the market, even the best operational efficiency programs are doomed to fail in the long run. We hope our guide above helps you establish a strong positioning in the market.
In conclusion, operational effectiveness is necessary but insufficient for organizational success. Achieving superior performance requires both operational excellence AND strategic positioning. Organizations that focus solely on one at the expense of the other are unlikely to sustain their competitive advantage over time.
