Evaluating Tesco's Competitive Position through Bowman's Strategy Clock Model

The assignment content discusses the application of Bowman's Strategy Clock model on Tesco Plc, a leading retailer in the United Kingdom. The analysis reveals that Tesco is positioned at various points on the strategy clock, including low price, hybrid, differentiation, and focused differentiation. These positions indicate that Tesco focuses on offering high-quality products at low prices to remain competitive in the market.

Academic Writing : Essay
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Table of Contents
INTRODUCTION .........................................................................................................................3
BOWMAN’S STRATEGY CLOCK ..............................................................................................3
Critically evaluate the chosen strategy model for improved company performance and business
benefits ............................................................................................................................................5
CONCLUSION ...............................................................................................................................6
REFERENCES ...............................................................................................................................7
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INTRODUCTION
In the present competitive era, organizations are looking for their competitive edge and
trying to meet the needs of customers instead of focusing on competitors. This report is going to
analyse the usefulness of business strategic models to determine the effectiveness of the
organization performance. For this report, Bowman’s Strategy Clock model is chosen for the
business analysis. This report presents the idea of Bowman’s Strategy Clock model. Along with
this, Tesco, a leading retailer of UK is selected to identify that how this model improves
company’s performance and provides benefits to business.
BOWMAN’S STRATEGY CLOCK
Bowman’s Strategy clock model is designed by Cliff Bowman and David Faulkner in
1996 and this model is based on corporate strategy that explains the combination of cost and
perceived value. In other words, this model is used for analysing the competitive position of an
organization in the marketplace against its competitors.
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Illustration 1: Bowman’s Strategy clock model
(Source: Ahemd, 2014. )

This strategic model represents eight different competitive positions that are used by the
firms to gain comparative advantage. For a single time, a company can be in one position but it
can improve its positioning from one place to another. This model is based on the fact that
consumers have different expectations in respect with the value for money raised from
purchasing a product or service. Eight stages of clock reflect comparison between the customers’
perceived value and price (Johnson et al, 2008).
As similar to Porter’s generic strategies, this model focuses on differentiation along with
the prices of products. Nonetheless, Bowman’s clock also considers a new way of assessing
competitive advantage of a business entity (Johnson et al, 1996). Research conducted by the
founder of this model represented that many of organizations are focusing on rendering the best
value at lower price that leads to differentiation and competitive strategy. Ahmed (2014)
described about the eight different stages of Bowman’s Strategy clock which are the further
stages of Porter generic model. It has been witnessed that offering more perceived value at the
lower prices is the most popular way to gain competitive advantage. According to the first stage
of this model, organisation offers low added value at low prices. Companies mostly use this
position to attract new and potential customers towards its products and services. Second stage in
which products and services are offered at low prices. Therefore, profit margin declines and sales
volume of goods is increased (Annual report of Tesco. 2015). Third position is hybrid at which
moderate differentiation in products are sold at moderate prices and this position brings
consumer loyalty. Fourth and fifth stages are associated with product differentiation. Nike is the
example of fifth position where high quality products are sold at low prices (Safón, 2007). On
the other hand, Armani Gucci and Rolls Royce companies are the examples of fifth stage as such
company’s sale their unique products at high prices. Sixth stage defines the position of company
in which products are sold at increased prices without increasing value side. Hence, company
achieves higher profitability in the sixth stage. In the seventh stage, products of organization are
sold at high prices with low value. This position occurs in monopoly situation. However, this
situation is no longer seen in the marketplace. Last but not the least eighth position represents the
strategy of business to sale products with low value at standard price. This strategy is not used by
the company as it leads to lose market share (Windischhofer, 2003).
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Critically evaluate the chosen strategy model for improving company’s
performance and business benefits
This section herewith deals with the application of Bowman’s Strategy clock on Tesco
Plc, a leading retailer of United Kingdom. This model is helpful for company to analyse the
competitive position of it in comparison to competitor's offerings (Annual report of Tesco. 2015).
Positioning of Tesco is defined below:
Position 2: Low Price: Company is seen in the second position of Bowman’s Strategy
clock as Tesco is known as market leader in the aspect of keeping price low. Major strategy of
company is to attract customers by offering them products at low prices. However, company put
efforts to increase the sales volume to cover the loss at low margin. Hence, it said that company
focuses on low price as well as attracting customers. This is the aggressive strategy that is used
by Tesco as compared to other competitors in UK (Haley and Boje, 2014).
Position 3: Hybrid: It has been evidenced that company offers products at low prices
and it also reinvests in maintaining prices of products at the lowest amount. This defined the
company's stage of being in the position of Hybrid. However, there are another competitors such
as ASDA, Sainsbury, Morrison etc. which are also offering the products at low prices but
company maintains its image by offering higher quality of services at the lowest prices than its
competitors (Baraskova, 2010). Low price factor is one of the most appropriate reasons for the
leadership position of Tesco in UK. Hence, Tesco is seen taking care of reinvestment cycle to
make prices to the lowest.
Position 4: Differentiation: Mentioned company is also seen in the Position 4 of
Bowman’s Strategy clock that represents differentiation. Differentiation is the key objective of
company in which e values added services and products are provided at the low price offered
(Baraskova, 2010). This positioning is achieved by keeping value for customers in mind.
Position 5: Focused differentiation: Prime objective of business is to focus on
customers and to improve relations with them. Company offers quality of products to the
customers for making effective relationhip. Tesco sometimes sales its unique products at
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premium prices with an aim of maintaining good customer loyalty. This strategy is followed to
survive in the high competitive retail market of UK (Turner and Wilson, 2006).
CONCLUSION
The above report represents the application of Bowman’s Strategy Clock model on the
leading retailer of UK. From the analysis, it has been witnessed that Tesco is at 2, 3, 4 and 5th
position of the model through which it maintains a leader position in the UK retail market. Major
focus of aforesaid organization is to offer higher quality of product at low prices to remain
competitive in the marketplace.
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REFERENCES
Ahemd, G., 2014. Bowman's strategic Model & its eight competitive direction of edge. [Online].
Available at: <http://www.studylecturenotes.com/management/bowmans-strategy-clock-
model-its-eight-competitive-directions-for-edge>. [Accessed on 30th November 2015]
Annual report of Tesco. 2015. [Pdf]. Available through
<http://www.tescoplc.com/files/pdf/reports/ar15/download_annual_report.pdf>. [Accessed
on 30th November 2015].
Baraskova, J., 2010. Strategic Positioning and Sustainable Competitive Advantage in Food
Industry. [Pdf]. Available through
<http://pure.au.dk/portal-asb-student/files/12191/Jekaterina_Baraskova_master_thesis.pdf>.
[Accessed on 30th November 2015].
Haley, U. C. and Boje, D. M., 2014. Storytelling the internationalization of the multinational
enterprise. Journal of International Business Studies. 45(9). pp. 1115-1132.
Rothaermel, F., 2012. Strategic management. McGraw-Hill.
Safón, V., 2007. How to Compete and How to Compete Profitably: A Model of Competitive
Positions and Business Performance. Global Journal of Business Research. 1(1). pp. 47-59.
Sarraf, Q. and Ellis, G., 2006. Business rules in retail: the Tesco. com story.Business Rules
Journal, 7(6).
Turner, J. J. and Wilson, K., 2006. Grocery loyalty: Tesco Clubcard and its impact on
loyalty. British Food Journal. 108(11).pp. 958-964.
Windischhofer, R., 2003. The Role of E-business for Competitive Advantage in the
Transforming European Food and Non-food Retail Business. Tampere University of
Technology.
Wright, R. P., Paroutis, S. E. and Blettner, D. P., 2013. How useful are the strategic tools we
teach in business schools?. Journal of Management Studies. 50(1).pp. 92-125.
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