This paper argues that the impact of individual higher education institutions' strategies on system diversity should be explored. By looking at how universities respond strategically to governmental policies as well as to the actions of other (competing) institutions, our understanding of determinants of diversity can be enriched. A conceptual framework focusing on institutional positioning is explained using the dimensions deliberateness of organizational actions versus environmental influence, on the one hand, and differentiation versus compliance, on the other. We posit institutional positioning as the mechanism through which organizational and environmental levels are linked. Our model features multiple dimensions and relations reflecting how higher education institutions locate themselves in specific niches, i.e. positions where they are able to gather the necessary resources for their core activities. The implications for research on diversity and for policymaking are discussed.