I just can’t get it out of my mind. This business of positioning I mean. The thing is that you have to choose between competing with a strategy of high value or one of least cost. One or the other.
Reckitt and Benckiser has a reputation for cleaning up, in the household goods market (– maker of Harpic and Dettol and Finnish dishwasher products).
A recent report showed that shoppers continue to choose Reckitt’s premium brands despite a worsening economy. The company believes that shoppers prefer the reliability of premium branded goods during hard times rather than cheaper private labels.
Holding the No 1 and No 2 positions in most of its product categories, Benckiser has become more focussed than some of its competitors. Unilever has hundreds of brands but Reckitt concentrates its efforts on 17 power brands that account for 85% of its growth.
And the figures speak for themselves. In the year to February 2009 it achieved a revenue increase of 22% to £6.5 billion, a 25% increase in operating profit and a market value of almost £19 billion – all this against a 26% fall in the FTSE!
This issue, as the good professor, Michael Porter, tells us is to choose one or other position – not the one that gets you caught in the middle.
Bye for now
