There are two approaches to this: Multilateration and Single Receiver Approach.
Multilateration: With this method, the position of an aircraft is determined by receiving transponder signals at several receivers. The signals are received at different locations and the time differences are used to calculate the exact position of the aircraft. This method is very precise and can also accurately determine the altitude of the aircraft. However, it requires several receivers, which increases the costs and installation effort.
Single Receiver Approach: This method uses only one receiving station to receive the signals from transponders. The position of the aircraft is estimated based on the strength and direction of the received signal. This method is less accurate than multilateration and can have difficulties in determining the exact altitude. However, it is cheaper and easier to install as only one receiving station is required.