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A recent study from London Business School’s Assistant Professor of Strategy and Entrepreneurship Aharon Cohen-Mohliver, LBS Professor of Strategy and Entrepreneurship, Donal Crilly, and Carlson School of Management’s Professor, University of Minnesota, Aseem Kaul, exposes the potential for social counter-positioning, where rival companies take advantage of socio-political polarisation to horizontally differentiate.
‘Corporate social counterpositioning: How attributes of social issues influence competitive response’, Strategic Management Journal, Volume44, Issue5, May 2023, theorises why, when and how firms should take a stance on a polarising issue, with products and services that are otherwise basically the same at the same price point. The authors argue that companies profit from taking a position on issues when a matter of public debate enjoys great prominence, when markets are competitive, and when the actions taken are mostly symbolic. The authors found that in competitive markets, taking a clear stance on polarising, noteworthy issues could segment the marketplace, increasing the profits and value for firms, and, potentially, intensify polarisation.
Interesting reference to this paper has been made in an opinion article written by the FT’s International Business Editor, Peggy Hollinger. Writing in a recent edition of the FT, Annual reports are fast becoming political treatises, Hollinger writes:
“Companies that came in highest or lowest on a well-known ranking of LGBTQ policies were rewarded by investors with share-price rises, while those in the middle were ignored. It was not about who had the most inclusive policies, but who had the clearest position.
“Not taking a position will make both sides hate you,” says London Business School assistant professor Aharon Cohen-Mohliver, co-author of the study. “People have to believe you are sincere and for that you have to bear some cost by using language that is very strong and clear.”
There are obvious risks in taking public positions on these issues, as companies such as Disney have discovered, observes Hollinger, yet Dr. Mohliver believes more companies will be willing to do so in future in order to differentiate themselves from rivals. “The more you see companies take a position on one side, the more the market opportunity increases for taking a position on the other side,” he says”.
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