Positioning Analysis as a Decision Making Tool

I confess.

I love the concept of product positioning. When used effectively, a positioning analysis becomes a super effective tool for strategic decision making.

Maybe it’s the way I was taught it, but it’s a concept that I find so useful as a way to add structure to what might otherwise be a jumble of data.

There are a lot of what I consider bad, or at least unhelpful, definitions of product positioning, but I think Google’s AI overview of the concept nails it. To paraphrase, positioning is how something (product, service, company, technology, whatever) compares to similar somethings (product, service, company, technology, whatever) in the minds of those who might consider using the product, service, company, technology, or whatever.

It even works when comparing political candidates on dimensions important to you.

To perform a positioning analysis, there are just a few steps:

1️⃣ Identify criteria (e.g. size) by which you want to compare the somethings you are analyzing.
2️⃣ Identify the opposite ends of the spectrum of each criterion (e.g. big, small)
3️⃣ For each something, score it along the spectrum for each criterion.
4️⃣ Learn from your work.

Let’s look at an example: energy resources (our favorite subject at Tilt Global.

Those who study energy resources have identified six performance dimensions:

➤ Continuity: the ability to deliver a continuous flow of energy
➤ Dispatchability: the ability to respond to fluctuations in demand
➤ Density: the ability to provide high levels of energy in a compact form
➤ Scalability: the ability to deliver energy in appropriate amounts
➤ Availability: the ability to deliver energy any time and any place
➤ Minimality: the ability to minimize contamination of or disruption to the natural environment

Without doing a full analysis, it’s easy to see the differences this sort of approach highlights. An energy resource like coal scores high on Density and low on Minimality; it burns hot enough to power smelters but scars the land and pollutes the atmosphere. Solar power, on the other hand, scores low on Density and high on Minimality; the sun will charge a battery without damaging the environment, but it’s a poor choice for smelting aluminum.

Here’s where the power and challenge of positioning analysis really kicks in – there is no one right answer. The right positioning depends, first, on who you ask. A scientist rating energy on these dimensions will produce a different answer that the general public.

Positioning also depends on the need that the something (product, service, company, technology, whatever) is serving. Some needs require emphasis on certain dimensions while others require a focus on others. As a strategic decision-making tool, positioning analysis is a powerful way to identify opportunities to carve a place in the market or distinguish one’s something from the competition.

It also highlights opportunities for innovation.