Strategic Positioning

A 2003 book entitled Kmart’s Ten Deadly Sins: How Incompetence Tainted an American Icon, author Marcia Layton Turner delved into the twists and turns of the battle for supremacy between KMart and Walmart. In a review of the book posted on, reviewer Kern Lewis says this:

Kmart hit on a successful vision, but came to believe in its own infallibility and lost track of where it really stood in the marketplace. Wal-Mart also hewed relentlessly to its vision, but also carefully adapted to marketplace shifts and opportunities and implemented like crazy to see the vision fulfilled.

Lewis goes on to say this: Lots of companies fail because they do not adapt to changes in the marketplace.

The markets on which we depend change. They always have and they always will. This is a fact we have to deal with. Consider that Procter and Gamble used to be the nation’s largest provider of candles, or that NuCor steel used to be in the Nuclear business – when nuclear was becoming something to fear rather than a source of renewable energy.

Identifying and addressing changing markets is a matter for strategic planning sessions. Understanding market changes, twists and turns and the impact on products, services and customers is, perhaps, the greatest activity in which to engage at a planning session.

A key challenge, however, is that for most credit unions the planning process does not offer much in the way of market change discussion. Sure, we spend a bit of time talking about regulatory changes, the changing interest rate environment, and the like. But looking deep into the migration of member segments and interests is usually only touched on superficially.

Let’s explore strategic positioning as a concept.

There are two words that are fundamental to understanding strategic positioning. The first is position, which means basically where something has been placed or arranged. The other word is relative, meaning in relation to or in proportion to something else.

When we talk about strategic positioning we are simply referring to the conscious decision to place the credit union in such a way that it advantageously overlays a relevant and vibrant market relative to market competitors.

Consider this basic analogy: If you want to grow a sunflower, you need to position the sunflower seed in an area where it will receive plenty of water, ample sunshine, and will not be crowded out by aggressive weeds and other pests.

Strategic positioning is, in effect, making a similar set of decisions – but for your credit union. Of course, the variables are much more complicated – requiring you to know such facts as:

  • Your current position as seen by the marketplace;
  • The positions of your key competitors, also as seen by the marketplace;
  • The “position opportunities” inherent in your local market as defined by the marketplace itself.

When you know these things can you identify and discuss the various opportunities available to the credit union, and then make a decision about where you might position your credit union to take advantage. Here’s an image to illustrate what I mean:

Positioning Matrix

Strategy debate for a given credit union should be around which market segments/opportunities offer the most benefit to both the membership and the institution. Consider the illustration. You see the positioning of the credit union and competitors relative to a variety of market opportunities. The current positioning of the credit union is close to, but not exactly aligned with a market that seeks a balance between self- and personal service, and desires a manageable selection of product options.

What to do? This is the strategic question to debate! Do you push into that market to the exclusion of others? It might make sense to do so considering the relative lack of direct competition. But – who is that other competitor, and what might they be doing? All research to dive into to prepare for effective strategic discussion and decision making.

To summarize, a benefit gained from an exercise such as this is that you can see where you sit in terms of market position relative to market opportunities, and react from an informed viewpoint. If we go back to KMart, had they done a little outward analysis of strategic positioning they might have found that the circle of opportunity that represented their once-loyal customer base had moved to a new areas on the positioning grid – and that they sat alone without a viable base of customers.

Regardless of how you go about marketplace analysis, remember that what you are trying to uncover is whether you need to change your marketplace completely in order to survive, or if you’re good to go. A worthwhile endeavor that will certainly benefit today’s and tomorrow’s member-owners.

Photo by Waldemar Brandt on Unsplash

Published by Tom Glatt Jr

Owner of Glatt Consulting - Distinctive Strategy Consulting for Credit Union Leaders.

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