Retail industry is very competitive and customers try to find out value for money before making any kind of expenditure. Decision making process involves the combination of perceived product/service benefits and its price. Bowman’s has developed ‘Strategy Clock’ model to analyse the competitive position considering the factors of product Price and the Perceived added value of the customer. Various positions are analyzed where customers (or potential customers) have different make thedecision.
Focusing on this model is important for NEXT in order to attain the organizational goal and gain from the competitive advantage. These strategies are market facing and cost is always a strategic consideration for implementing these strategies.
Positions 1 and 2 mainly describe the customers who are primarily concerned with price when the benefits of product/service meet their requirements. Such customers give importance to functionality over service or design or packaging. At position 3 customers are focused on high perceived value at low price. Retailers always try to get benefits from such customers. Customers can even reinvest the price if they are getting higher value of the product.
Position 4 is considered one of the important competitive strategies among retailers where they are more focused on product differentiation as their competitive strategies. If the different available product is meeting the requirements of customers, they are ready to pay higher amount as well.
Customers at position 5 and 6 look for customized products and they are ready to pay even a higher price for such products. NEXT has invested more on featured products such Lipsy as one of the more popular brands for female. Here, company is gaining competitive advantage because its customers are paying higher amount for featured or customized goods.
Position 7 is generally take place in a monopoly market where fewer markets have the advantage to set the price rather focusing on the quality. In the retail industry, this position has no relevance.Loss of market share creates a situation of Position 8 where customer’s perceived value of goods is low than the price
Position 3-6 can define NEXT Plc’s strategic position very well in the competitive market and make the firm to gain from the competitive advantage.