There are 5 different positions your players can have. Each position needs different skills to be played well.
Goalkeeper - mainly needs goalkeeping
Defender - mainly needs tackling
Midfielder - mainly needs playmaking
Wingplayer - mainly needs passing
Striker - mainly needs scoring
Besides the goalkeeping position, the positions are quite flexible. A defender for example can play in any of the 3 defensive positions.

Players only play well in their own position. There is no fixed out-of-position penalty: strength loss depends on the player's skill level and position on the field. Flexible players lose less strength than inflexible players. To find a suitable position, move the player around in your formation and check the Position bar.
Switching positions
While any player is "born" to play on a specific position, they are not eternally bound to it. You can change a player's position at any time. Simply select the player from your player overview, then hit the "new position" button. It takes 10 days for the player to get used to his new position, until then he is only able to play and train with 50% efficiency.
To reposition a player instantly you can play a "position trading card".
The player will instantly be able to play with full efficiency. He will finish the training day based on his old position. (If you switch a player during the day, while the training is underway, he will begin training based on his new position on the next day. However, the training day completes after the last training slot of the day, so if you reposition him last in the evening after all training is complete, it will take an additional day, as "tomorrow's training day" has already begun.)