Mirjana Prljevic, Menora Co. Consulting, Belgrade/Paris
ABSTRACT: The transformation of international economic relations after the Cold War has brought novelties in the field of strategic positioning, primarily in the domain of positioning of the states. After the period of transition, and due to the consequences of the global economic crisis, the importance of an exact and lasting definition of the strategic position of the Republic of Serbia, are proved to be done. The current crisis of society, i.e. of statehood, has shown the necessity of having a clear definition of the two most important dimensions of strategic positioning: the uniqueness of offer and the specificity of position. One of the integral solutions is to establish its Global Positioning Strategy. Without a GPS for the next fifty years, Serbia will not be successful in harmonizing its potentials with its target goals. Without a professionally defined diagnosis of the current situation in the country, further positioning is not possible. Right now, when knowledge and innovation determine the economic advantages in the modern world, there is too little innovation and a lack of a competitive intelligence network in Serbia which could initiate internal development. Without a clear perception, we will not rise to a stable international position. Without a Global Positioning Strategy, a lasting, successful and sustainable position of Serbia cannot be achieved.
KEY WORDS: Global Positioning Strategy, New Economic Diplomacy, Competitive Intelligence, Innovations
At the moment when the repositioning of Serbia in contemporary international relations requires serious efforts and hard work, one of the integral solutions is to establish its Global Positioning Strategy. Positioning is not what you have done for your product; positioning is what you have done about the perception of your product in the consumer’s mind. The concept of GPS by itself can be defined as development and support to private and state-owned assets, governmental or military relationships, and business agreements with foreign countries positioned at key global strategic points, either independently or in multilateral arrangements, for the purpose of accumulating information, influence, power and technological expertise1. We can freely say that, today, the positioning strategy is far more present than it can be noticed by simply observing the market. Today, when the senses of sight and sound of average adults are exposed to roughly 100,000 words outside of their daily job, it is not easy to draw attention and leave a trace so that tomorrow your country may become their personal choice for investments, tourism, culture, education, sports or politics. Another trait of human attention is its short span (Bon 2009). These two premises have resulted in the fact that the positioning strategy, which combines the features of the differentiation strategy (how to be different from one’s competitors) and the segmentation strategy (how to design the best offer for one’s chosen target group) became dominant in the last three decades, in comparison to all other strategies, when human perception is concerned.
This is an explanation and key reasons why today we have achieved full success in designing of different positioning concepts concerning different effects, results and dimensions of globalization. When answering the question of how to position ourselves in the eyes of our own citizens and citizens of other countries through Personal Positioning Concept, Organization Positioning Concept or Country Positioning Concept, how to make both our market and our natural beauties more attractive, we can reach out for countless techniques of country image creating and country branding. All these are the final outcome of strategic positioning, from the perception in the message creator’s mind to the perception in the message receiver’s mind. The better we know a citizen’s habits, customs, trends, ways of making decisions, aspirations, perceptions and understanding of matters, the more success a positioning strategy will have.
Today, we have a lot of different, unique and successful examples of global positioning of countries. Brazil is successfully marketing itself as a reformist nation with a global environmental model —“the lungs of the planet” and the home of the Rio Earth Summit. It is a leader in biofuels, it is willing to protect the Amazon and it plays a prominent role in climate change negotiations. Now Brazil is exporting its expertise in fighting social inequality and agricultural development to the world. The GPS panel has heard many times how Australia plays a bigger role on the world stage by focusing its efforts where it can make a difference, how Switzerland benefits from positioning itself as a country which is part of Europe but not constrained by the EU rules, and how Norway — an energy-producing nation dedicated to a green-energy future, the hard-headed pursuit of social justice, and peace in the world at large — is the new Canada.
The GPS comparison reflects our belief that the digital age is different from anything before, in the way that it creates new knowledge networks and alters the traditional balance of power of relationships. Although the world is increasingly multipolar, it is also more interdependent than ever; information is accessible by individuals and groups without the filter of diplomats or journalists. We are in a period of extraordinarily fast changes and global power shifts. Nobody can predict a future which is being written on the fly. But we can and must influence the direction where it is heading and develop the strategies and policies needed to best position ourselves in going forward. The current crisis of society, i.e. of statehood, has shown the necessity of having a clear definition of the two most important dimensions of strategic positioning: the uniqueness of offer and the specificity of position.
I think that Serbs would like Serbia to become the new Serbia. It will take ambition and seriousness of intent, a lot of hard work and clear goals. The Serbian people need to decide where Serbia wants to be and how to get there. We cannot sit on the sidelines as the world moves on.
Only with the joint forces of the government, the corporations, the media, the military, the NGOs and the academia can we find the right direction. In today’s time of extremely fast changes and globalizations, strategies, which are usually made for a period of twenty five to fifty years, became one of the most difficult challenges for the state policy. The strategies are at the same time, equally challenging and necessary. A fierce competition for resources - energy, minerals, water and food - is taking shape on a global scale. It is exactly these new perceptive dimensions of sustainable development that dictate the global positioning strategies.
Our Global Positioning Strategy is meant to elaborate in detail where Serbia, as a country, is situated at the moment, and determine how we can best reach our optimum destination. Let’s be clear: if we know where we are going, there is no need for GPS navigation; if we do not sure, there is. The same goes for our Global Positioning Strategy.
The global economic crisis and the worsening of numerous tensions in regional geopolitics are making the fate of our world more and more uncertain with each passing day. In such a context, the competing strategies among countries, in relation to all their potential resources and wealth, are put in the focus of international relations. The rivalry between countries is escalating, and only if we apply careful analysis and wisely choose our priorities will we create comparative advantages that will be the right choice for us.
It is well known that a strategy clearly defines the ways and means to achieve the set objectives, and that it is not, as we can often notice in Serbia - a wish list or a castle on a cloud. In this time of crisis, only through joint efforts, well aware of the challenges set before us, can we achieve significant results that will lead us to a successful long-term economic recovery and development. We need to understand that challenges of the future of humanity, and thus challenges that Serbia is facing, will lead to continuous observation of the changes occurring in the world. Proper elimination of obstacles, pointing to the correct paths, coordination and integrated approach of all efforts in the country, can result in attracting necessary investments.
Managing a market position implies determining the image and market positions of competitive countries. Research on the image should discover how the multitude of impressions related to your regions or your country as a whole are organized in people’s minds. Therefore, it is necessary to determine the dimensions for evaluating the phenomena we are examining – the stimuli, as a first step in the phase of diagnosis. After the research, the analyses of these stimuli will serve as the basis for the Perceptual Map, the first map in establishing the appropriate foundation for a high quality GPS.
Concretely, strategic thinking in any context involves the identification of a set of issues, the selection and/or development of an appropriate conceptual framework for assessing these issues and identifying potential courses of action, measuring key variables, and selecting courses of action. We need to analyze all the information required to define the geographical scope of industries, the competitive advantage of countries (regions) and their implications for the location of activities, and the appropriate trade-offs between local responsiveness and global integration of different activities in the value chain. International strategic thinking, as the basis for a high quality GPS, requires frameworks for the following levels of analysis: the geographical scope of the relevant industry, the attractiveness of various locations as markets, sources of factor inputs or strategic competencies, and the overall competitive advantage afforded by various locations, the sustainability of internationalization as a (dimension of) competitive strategy for a particular entity (region), the degree of global integration and local focus of activities or processes.
All the levels of analysis identified above play a role in the overall strategic process. Often, this process is depicted hierarchically as “zooming in” from the most macro to the most micro perspectives, or, on a temporal scale, from positioning to implementation. In practice, the process is more simultaneous and chaotic, since changes in opportunities or threats may appear at any of the levels, triggering a new round of strategic assessment. Nevertheless, it is useful to present the frameworks as a simple hierarchy from industry structure, location-based advantage, and the various dimensions of internationalization of the targeted companies, or regions. In addition, before we proceed with any new state interventions in defining new strategic guidelines, we should answer the question of what was wrong with the previous institutions, instruments and programs, why they failed to produce results, and what will be different now.
In order to obtain the right results, since the very beginning certain principles should be set, which will serve as the basis for the creation of the action plans. One of the best examples whose system should be taken into consideration in the first stage of defining the Serbian GPS is the so-called Canadian model of GPS principles. These are the following:
A proactive analysis of the events at the global scale is also needed – this means that certain countries, when drafting their GPS strategies, use analytical teams for the precise detection of GPS priorities of other countries, some of which being their direct competitors on the world map, and some of which being their important strategic partners. One of the best examples of such practice is the American analysis of China’s GPS, which is well explained by Frederick W. Stakelbeck Jr. in his text Better Analysis Needed:
It is extremely important for U.S. and Western analysts to identify emerging geostrategic alliances and trends in a timely fashion to provide a solid basis for the formulation of meaningful hypotheses. This process allows for the targeted development and implementation of a unified response to confront any menacing GPS strategy. This proactive approach requires individual, group and organizational analysis, research and interaction using a blend of creativity, intuition, and imagination to connect the “global dots” allowing a clear pattern of China’s global behavior to emerge. In any evaluation of China’s unique GSP strategy, analysts must ask several questions. First, why are particular countries or organizations involved with China? Second, what does China gain or lose by entering into a specific agreement and how does it impact the country’s overall GSP strategy? Third, what is the historical context in which agreements are made? Fourth, is the political climate; leadership ideology and overall sentiment of a particular country or organization involved with China favorable toward current U.S. foreign policy initiatives? Finally, what does a country cooperating with Beijing possess, such as natural resources, seaports and technology that could assist China?
If the Republic of Serbia is among the very few countries around the world that have signed Strategic Partnership Agreement with the People’s Republic of China at the highest state level, such an analysis of relations would certainly produce the appropriate guidelines for a better perception of the Serbian market in the eyes of Chinese investors, and vice versa.
One of the best examples of this approach is the publication called S&T plans of six countries published by the Committee on Global Science and Technology Strategies and their Effect on U.S. National Security in the auspices of the National Research Council:
Globalization has facilitated the success of formal S&T plans in many developing countries, where traditional limitations can now be overcome through the accumulation and global trade of a wide variety of goods, skills, and knowledge. As a result, centers for technological research and development (R&D) are now globally dispersed, setting the stage for greater uncertainty in the political, economic, and security arenas. These changes will have a potentially enormous impact for the U.S. national security policy, which for the past half century was premised on U.S. economic and technological dominance. The increased access to information has transformed the 1950s' paradigm of "control and isolation" of information for innovation control into the current one of "engagement and partnerships" between innovators for innovation creation. Current and future strategies for S&T development need to be considered in light of these new realities. This book analyzes the S&T strategies of Japan, Brazil, Russia, India, China, and Singapore (JBRICS), six countries that have either undergone or are undergoing remarkable growth in their S&T capabilities for the purpose of identifying unique national features and how they are utilized in the evolving global S&T environment.
The third important aspect of diagnosis is external analysis of goals that the state has defined as strategic. In that sense, monitoring the global trends of sustainable development may be of vital importance in finding the right direction for external communication of GPS.
Therefore, we must not bypass the activities of three important actors in this field: the Global Economic Symposium (GES), the Kiel Institute, and the Rockefeller Foundation. With their initiatives, these three institutions of strategic importance have contributed to a better understanding of the global scene for which all of us are, in fact, competing by trying to position ourselves. These institutions show how we should monitor the changes around the globe or at national levels, and how to approach them with a new perspective and point of view of everyday problems. I will mention their aspects that are important for GPS.
1. The Global Economic Symposium (GES) is meant to give a new impetus to global problem-solving. Our world has become increasingly interdependent and its problems — climate change, financial crisis, failed states, vicious cycles of poverty, educational deficits, unsustainable energy demands, water management and many more — are interdependent as well. However, visions are not enough; they need to be translated to concrete action plans and policies, business strategies, civil initiatives and research agenda. These action plans should emerge as the outcome of a dialogue among leading academics, business people, policy-makers and representatives of the civil society based on state-of-the-art research. Our ideas must go through the crucible of rigorous analysis and evaluation.
2. The Informal City Dialogue project of the Rockefeller Foundation is alive and flourishing in nearly all cities in the Global South, deeply interwoven with the formal city but often separated by exclusionary policies, lack of services and investments, and marked out in large areas of inadequate infrastructure. Yet the formal city cannot exist without the informal city. Many residents living in informal settlements work in the formal economy and many living in the formal districts find their livelihoods in the informal economy. The OECD estimates that half the workers of the world—close to 1.8 billion people—hail from the informal sector, contributing to an informal economy estimated to account for as much as 40% of metropolitan or city GDP.
3. The Kiel Institute Innovative with its Solutions Based on the Positive Economy. The positive economy concept deals with problems differently than other economic concepts. It is based on rational altruism and respect for future generations. It considers that the desire to make profit is merely a tool and not an end in itself. It aims to make humankind’s entire capabilities flourish. It considers the earth to be more than just a source of resources. Rather, it is what makes it possible for everyone to (co)exist. In short, the positive economy is a new economic concept that goes far beyond the concept of the market economy. The purpose of the commission is to find solutions to pressing ecological, demographic, economic, and political problems that, according to the initiators of the commission, have arisen for the most part because decision makers have often taken short-term views. These problems need to be dealt with by 2030.
In the past couple of decades, the Serbian authorities have changed both the priorities of their foreign policy and the goals of the country’s economic development. These frequent changes are not only bad, but they also lead to confused perceptions of foreign investors, citizens and potential partners. Not only do not they contribute to the stability of the selected environment, but they also lead to wrong perceptions of what the real strategic goals of Serbia are, and what was supposed to be achieved through these goals. Simply put, the diagnosis phase at the strategic level of analysis of the international position of Serbia in the previous decades, did not even exist.
Any management consultant can tell you that 90 per cent of strategy is execution. My methodology suggests that all obtained and processed information should be gathered into three parts, so that the methodology formula consists of: MMP x USP x POSM
MMP- Marketing Mix Package x USP-Unique Selling Proposition x POSM- Point of Sale Material Marketing Mix package is the base result or product of a marketing strategy. As a term, the marketing package has been used for almost half a century as the abbreviation for the combination of all tactical activities in marketing. According to the 7P model of MMP and in line with my methodology of strategic positioning, there are exactly seven elements, i.e. areas in which we need to precisely stipulate all the important steps. These are: Product, Price, Promotion, Distribution, Public Opinion, Politics and Personality.
On the other side, at all stages of defining, designing and implementing the GPS strategy, the internal and external strategic communication must be fully aligned with the so- called Coordination-Communication-Cooperation rule of all state authorities, civil society representatives, economy and business representatives, in relation to the Coordination Team for GPS drafting. Well united economic potentials of our country, presented through an integral approach to direct communication with decision makers, will make the final GPS portal visible to all those who are defined as the target group that we want to reach with our information.
1P = Product = the most delicate element of the strategy, because it marks the positioning of a country, its business potentials, its natural resources, its heritage and culture, its comparative advantages in comparison to neighboring countries, its traditional values and, of course, its citizens themselves. The home country’s image fortifies the diplomatic activities. In his brilliant monograph, Wally Olins writes that nations need new images because ‘a changing reality is leaving perceptions far behind’ (Olins 1999)’. This is especially true for developing and transition countries, which have experienced dramatic changes, but this is underestimated abroad. Country branding as the final result of GPS is about ‘presenting a nation or region in a powerful, attractive and differentiated way’: however ‘branding works when it projects and reinforces a changing reality – but it can be counterproductive if isn’t rooted in fact’. The key is to use a central idea that is powerful and simple, capturing the country’s unique qualities. 2P = Price = in this case, it is reflected in fiscal and monetary policies, but also in the solutions that the state implemented in the field of country’s economic development strategy. The facts are showing that the industrial revolution never completely overtook the economic territory of Serbia, in the exact sense of this notion. The road toward reindustrialization that we should take is certainly the only road toward survival, in line with the principles of sustainable economic and territorial development. The financialization (a term that means that the financial sector and the service sector make up the largest part of the gross national product), which was the core of our transition strategy, is one of the reasons why the real economy in today’s Serbia is in such a poor shape, while the financial sector is doing relatively fine. This is why the state should secure the conditions for financial consolidation and growth of the level of economic activities, and to set as its priority the type of manufacturing which is based on our resources and comparative advantages (energy, agriculture, food industry, infrastructure and traffic). The second issue is the creation of a Development Bank which would certainly mean a great deal in internal communication with all healthy economic actors. The Development Bank would have to be managed independently from politics, and along with its development, other institutions and programs would have to be shut down. The Development Bank would not be a competitor to commercial banks, but it would encourage them to finance the economy, by means of its funds and program guidelines. However, it would have to avoid direct crediting, and allow the financial institutions to choose their projects. 3P = Promotion. Product Country Image can be defined as the total of all descriptive, inferential and informational beliefs one has about a specific product from a particular country, which is organized in some meaningful way in a consumer’s mind. These can be any immediate thought about an origin country, which is linked in memory to the PCI. The link may be strong or weak, but it tends to be strengthened by many experiences or exposures to communication. To provide specific examples, the town Leskovac can position ajvar (minces roasted pepper salad), the town of Cacak can position kajmak (light cheese spread) and šljivovica (plum brandy), while the towns of Svrljig and Homolje can position their famous cheese. For small countries, like Norway, a Country of Origin marketing strategy constitutes the possibility of enhancing its international competitiveness within products and services that otherwise would be too small to position on a global scale. However, using country-of-origin in marketing entails far more than just putting a "made-in" label on the products, particularly when international knowledge of the country is limited. 4P = Placement. There are no aspects of external relations, bilateral, regional or global, which are not affected by ‘image’. Proactive diplomacy demands that serious and constant attention should be paid to the country image. Diplomacy theorist Brian Hocking has written a survey of 200 US Fortune 500 companies, in which 72 per cent said that ‘company brands interact with national identities in concrete ways’ (Hocking 2000). Consider the following examples. China used image consultants in marketing Beijing as the venue for the 2008 Olympics and Shanghai did the same in presenting itself as a ‘world city’ (Expo 2010). The successful tourism destination countries make focused use of branding. Poland recently invited Olins to help re-fashion its overseas image. South Africa has long been an accomplished practitioner of country branding. Brazil has attached weight to this issue as well, and has a special unit in the office of the Mister of Foreign Affairs that oversees image activities. Serbia can certainly rely on the positive experiences of others in this domain and find its own way toward defining the country image. Adequate and well coordinated placement of the appropriate information should certainly be performed at the following levels: the ministries with their global networks of economic diplomacy, the government’s agencies for promotion of export and attraction of investments, the branch offices of regional chambers of commerce, the information centers for people in Diaspora, the business clubs around the world whose members are influential and eminent Serbs, the business clubs in general, the behind-the- scenes events during large sports championships or World EXPO exhibitions, the media associations, and the NGO forums and conferences. 5P = Public Opinion. Here, the role of the media and the civil society is very important, both at the local and at the international level. 6P = Politics = as political activities have a huge influence on positioning. This is the most important element as GPS defining and implementation are the focus of our work. We have but a few positive examples of our positioning at the global scale, and it boils down to individual persons, cities, touristic destinations and a couple of festivals. 7P = Personality, i.e. personal characteristics. The modern diplomat must be a specialist, adept at accumulating knowledge and building networks. Headquarters would focus on strategy, coordination and integration. It is always interesting to analyze the characteristics of selected persons whose personality may be part of a country’s GPS. The Republic of Serbia certainly has a few individuals whose results and life achievements could be equal to the global positioning level. These are certainly Rastko Nemanjić, emperor Dušan the Great, Marko Kraljević, Milutin Milanković, Nikola Tesla, Mihajlo Pupin, Vuk Karadžić, Josif Pančić, Nikolaj Velimirović, but also Novak Đoković, Milorad Čavić or Milica Mandić. Why should be the list of names and abstractions that we start our analysis from be diverse and cover longer periods of Serbia’s history? Because this is the best way, by using a funnel-type analysis, to identify the most important perception points concerning those domains in which Serbia wants to position certain potentials.
The second element of formula, USP is the essence of GPS. It is a marketing message that should provide the consumer with the answer to the question: Why? Why to come to your country? Why to invest in your country? We must be sure that USP is a message that in the best way explains to the consumer or investor that coming to Serbia is something special. USP is one sentence or order of minimum two to maximum four words, it should be legible and understandable, it should be correct and plausible, and in that sentence or order of the words, there is always one word that emphasizes the uniqueness of your GPS offer, way of business or a position of country.
The GPS Panel in Canada has identified the following three overarching Canadian interests: Prosperity, Peace, Cohesion as USP of GPS Canada. Prosperity: A successful country provides a high standard of living for its citizens and opportunity for its young people. Peace: Security is a fundamental goal for all countries. We prefer the more positive and ambitious term, “peace,” since a peaceful world serves our interests and those of the other countries with whom we interact. Cohesion: National unity and threats to it have long figured in our international policies, from the Imperial impulses of the Boer War and the First World War to France’s periodic encouragement of Quebec separatists. In the decentralized federation that is Canada, it is imperative that we create the domestic consensus to speak with a single voice beyond our borders.
The third element, POSM is much more than point of sale material. For strategist, POSM is of great importance for two reasons: firstly, it costs and secondly, you should know when and how much to “dose” it. POSM presents your country on the best chosen way and the GPS Coordination team must work on it together with the National Touristic Organization, Ministry of Culture, Ministry of Science and Education and Regional Local Agencies for Economic development.
So, today, why is the improvement of Serbia’s international position is unthinkable without a properly defined GPS? Simply put, because the effects of strategic positioning entail country success and profitability. The effects can mostly be seen in the following areas: barriers to the competitors who enter the given market are successfully created, solid basis for the so-called fine tuning of the GPS is created, and the positions in relation to other strategic partnership countries, investment funds, and international institutions such as WTO or IMF are strengthened. An excellent GPS, with motivated Government and citizens to implement it, results in long term success for any country today. That includes Serbia too.
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