What is counter-positioning?

What is counter-positioning?

• A. A firm positions itself against competitors in a way that is difficult for them to respond.
• B. A firm copies a competitor's model.
• C. A firm exits the market.
• D. A firm lowers prices across the board.

Answer: (A)

Counter-positioning is about creating a way of competing that makes it hard for existing rivals to respond without undermining their own business. The firm introduces a new model or value proposition that customers value, but that incumbents cannot copy without sacrificing what currently makes their business work. Because adopting the new approach would force them to abandon or heavily change their proven model, they’re unable to respond effectively. A classic sense of this is when a new player offers a fundamentally different way to deliver value—one that doesn’t align with the incumbents’ existing structure. For example, a streaming-subscription model changed the economics of content delivery in a way Blockbuster’s store-based rental model couldn’t easily imitate without cannibalizing its core business. So the firm positions itself against competitors in a manner that creates a response that’s difficult for them to mount. This isn’t about copying a competitor or about simply lowering prices across the board—the former is imitation, the latter is price competition. Counter-positioning uses a distinct, incompatible model to create a lasting challenge for incumbents.

Counter-positioning is about creating a way of competing that makes it hard for existing rivals to respond without undermining their own business. The firm introduces a new model or value proposition that customers value, but that incumbents cannot copy without sacrificing what currently makes their business work. Because adopting the new approach would force them to abandon or heavily change their proven model, they’re unable to respond effectively.

A classic sense of this is when a new player offers a fundamentally different way to deliver value—one that doesn’t align with the incumbents’ existing structure. For example, a streaming-subscription model changed the economics of content delivery in a way Blockbuster’s store-based rental model couldn’t easily imitate without cannibalizing its core business. So the firm positions itself against competitors in a manner that creates a response that’s difficult for them to mount.

This isn’t about copying a competitor or about simply lowering prices across the board—the former is imitation, the latter is price competition. Counter-positioning uses a distinct, incompatible model to create a lasting challenge for incumbents.