Laura Ogle

WIP

Just because we can’t predict the future, doesn’t mean we can’t change it. With a little observation, interrogation, and ol’ fashioned elbow grease we can build the future we want, brick by brick. The future is still a work in progress.

Interested in what is kickin’ around in my noggin re: the future of design, business, or anything in between? That’s cool… give some of these bad boys a once over.

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Connecting Positional and Resource Based Views of Strategy

The Positional and Resource Based views of strategy have traditionally been seen as separate mechanisms for developing competitive advantage — with academics often favoring one camp over the other; however, as markets have become increasingly complex, a defensible strategy requires a combination of both views in order to compete successfully. 

Positional View

The Positional View is concerned with how an organization gains and maintains competitive advantage based on its strategic position within an industry. Often seen as inexorably tied to branding, the Positional View of strategy is much deeper than that alone — it should clarify an organization's long term vision to bolster internal and external decision making, determine how it is differentiated from competitors in the market, and how it creates and delivers value to customers.

Michael Porter succinctly describes the Positional View in What Is Strategy? as achieving a sustainable competitive advantage by performing different activities than rivals, or performing similar activities in a different way, thus preserving and elevating what sets the company apart (Porter, 1996). True competitive advantage lies in creating market fit — in which key activities reinforce one another — understanding what activities are necessary to fortify the overall strategy, as well as which activities should be foregone so as not to encourage brand erosion.

Resource Based View

The Resource Based View (RBV) was originally introduced by Birger Wernerfelt in his article A Resource-based View of the Firm, stating that competitive advantage could be achieved through a focus on key resources unique to the organization rather than product-market fit — as the market is an unstable variable. The Resource Based View is mostly concerned with an internal analysis of the firm’s tangible and intangible assets, and the ability to employ them more effectively than the competition. The RBV attests that as markets are becoming increasingly unpredictable, investing in valuable, rare, inimitable resources that are organized to capture value (VRIO), creates a higher likelihood of sustainable competitive success — assuming that said resources are heterogeneous and immoble. 

Similarities and Differences

Though there are distinct differences between the two views, Positional and Resource Based views of strategy share a lot of commonalities — and are often used in tandem to create a holistic strategy. The Positional view tends to focus on external market forces — understanding where the firm lies in the larger industry landscape, developing a differentiated position, and utilizing customer facing levers (i.e. advertising, price, channels, etc.) to communicate said differentiation and demonstrate value. Whereas the RBV takes an internal view to determine the best mix of activities to buttress the overall strategy from direct and indirect competitors. Two firms could have nearly identical positioning strategies, but if their resources and capabilities differ, the implementation of that positioning will vary greatly — and vice versa.

Where RBV details the assets and capabilities necessary to defend a firm’s competitive advantage, positioning provides the context in which those resources will be activated. A defensible strategy requires toggling between the two views: determining which resources are necessary to create a differentiated position, utilizing said position to create customer value, then applying the return on that value towards reinforcing key resources. 

Intersection with Design Strategy

Utilizing the frameworks and methodologies inherent to design strategy brings a human-centered rigor, and adds critical dimension when used in conjunction with the positional and resource-based views of strategy. I believe the rise in design strategy is intrinsically tied to the increase in competition that came with social media and direct to consumer sales — as the barriers to entry for many industries plummeted, markets became highly saturated with brands vying for consumer attention, and consumer education and discernment around product choices rose.

The solutions-based approach adopted by design strategy ensures that the resources being employed are in service to an actual user need, and strategic market research can lead to insights that allow the positioning to speak directly to the alleviation of quantified customer pain-points and opportunity for meaningful gains.

Conclusion

A sustainable strategy should be multi-pronged — relying on positioning to provide market context, resource based view to maintain operational focus, and design strategy to ensure that the context and focus are directed at tangible user needs. Determining the ideal mix is dependent on the industry and growth stage of an individual firm, but a combination of all three is necessary for long term strategic success, as each provides a different lens through which to view market strengths and opportunities.

Sources

  1. Porter, M. E. "What Is Strategy?" Harvard Business Review, Vol. 74, no. 6 (November–December 1996)

  2. Wernerfelt, Birger “A Resource-based View of the Firm” Strategic Management Journal, Vol. 5, No. 2. (Apr. - Jun., 1984)

Laura Ogle