Strategy, competitive advantage and the promotional mix A Polestar Group case study
Page 1: Mission and market
A mission statement sets out why an organisation exists. Having a mission statement helps to clarify what the business is trying to achieve; internally it sets out what is important to the company and influences how resources are allocated and how people behave. The Polestar Group's mission is: 'To be Europe's most innovative, profitable and customer-focused printing company'.
This means that the company actively looks for ways of improving its service to its customers. This focus on customer needs is particularly important given the high degree of competition in the printing market and the high level of capacity in the industry relative to demand.
The printing market is characterised by large numbers of relatively small printers (90% of companies have less than 20 employees). Large companies such as Polestar are therefore unusual. In total there are over 12,000 printing companies in a market that was worth over £14 billion in the UK in 2001. Despite being the second largest industry in Europe, printing has a low profile. Competition is particularly intense given the fact that entry into the market has become easier with developments in technology. Inefficient companies are likely to struggle and be replaced by new entrants.
The high level of competition means that many companies fight it out on price - they try to undercut each other to win sales. Given the excess capacity, buyers know they have many options and so are in a strong bargaining position. Polestar, however, focuses on a differentiation strategy. The danger with price competition is that it squeezes companies' profit margins and turns the product offered into a commodity. Polestar sets out to provide a service that is genuinely different from the competition by being more reliable, more flexible and by providing unique printing with additional related services.
By tailoring the service offered Polestar enables its clients to achieve their own objectives more effectively thus making this service more valuable. By adding value for its customers, Polestar aims to differentiate its service from its competitors. This passion to understand its customers enables Polestar to stand out from the competition.
Traditionally, the printing industry has been product-orientated. Companies have invested in production equipment and then tried to find businesses to fill the capacity available. They have offered a basic service to customers whereas Polestar looks to innovate to find new ways of helping its clients be more successful. Polestar believes it is essential to be market oriented - thinking about the needs of its customers and providing a service to match.
Polestar Group | Strategy, competitive advantage and the promotional mix