MARKET leadership is a highly coveted status. Regardless of the industry or the size of the organisation, every company wants to be the leader in its field; a king in its category.
The best of business-to-business (b2b) companies aspire to be undisputed. Global giant
Smaller b2b companies are more often content to just be leaders in their pack and perhaps stay hopeful that they too can play in the big international league one day.
In essence, being a leader IS a big deal. The fuss about being a leader stems from obvious benefits that come along with status. The world puts leaders on a pedestal and reveres them while competitors can only watch as customers automatically walk through their doors while strategising and scheming ways to out-do these leaders.
When you are a market leader, you are practically king of your kingdom of customers. The stronger your reign, the harder it is for your enemies to overthrow you. So yes, the first and primary objective is BEING king. While many will say that the size of your kingdom matters, expanding your boundaries is a secondary issue you can worry about after being king. In a world of business and brands, “It is better to be a big fish in a small pond than to be a small fish in a big pond”.
BUT HOW DO YOU GET TO BE KING?
The answer is simple. As history of the business world would prove, brands that get into the market first have a higher success rate of being king of their category in the long-run.
Just like the pioneers who conquered lands, being the first to stake claim on your market is the easiest way to be king of that kingdom. As first rulers of the kingdom, you can establish a strong foot-hold that makes it tough for later entrants to break the leadership bond you have built with the market; being first in the market only gives you the right to rule. If you do not capitalise on your first mover advantage to build that foot-hold in the mind, being first would not matter.
But markets do get saturated with competitors and when so, what do you do? You create your own market; your
own category.
CREATING KINGDOMS
When markets are filled with players; do not be fazed. Competition is normal in business and when it happens, you migrate by creating new markets of your own; new categories. Let’s look at the portable music war.
APPLE VS SONY IN THE PORTABLE MUSIC INDUSTRY
From the late 1970s when portable music first took its form in the Boombox, to the early 1990s when the MiniDisc player was the most advanced form of portable music, Sony ruled the portable music kingdom. In 1997, the first MP3 player from South Korea hit the market. This was the beginning of the age of digital music. At this point, Sony still led the portable music industry with its Discmans and MiniDiscs. It was only in 2001 with the arrival of Apple Computer’s iPod was the industry truly revolutionised. Though Apple wasn’t the first entrant to the market, its success in building mindshare in the new category of MP3 players literally threw Sony out of the game. Sony’s Discmans and MiniDiscs were considered obsolete. The proliferation of iPods has since made it the ubiquitous form of portable music players.
THERE ARE ESSENTIALLY 2 STRATEGIES THAT CAN BE USED TO CREATE NEW CATEGORIES
1) Divergence: In this method, a new category is created by splitting off from the original category. One way of doing so is by finding uncontested markets where your brand can be first. This was what Dell did when it went up against IBM. It looked to the consumer market largely ignored by IBM and further differentiated itself through its value proposition of lower costs through the sale of PCs direct to customers. In the majority of scenarios, divergent categories can co-exist with the original and with each other.
2) Evolution: The method of evolution refers to a gradual and linear process where a new category replaces the old one. Evolution usually kills the existing category when the new one comes along. This was the path taken by Sony during its near two decade reign of the portable music industry with its evolution of the Boombox in the late 1970s, to the Walkman, to the Discman and finally to the mini-disc in the early 1990s. When a new category of portable music players like the Discman came along, it practically killed off the use of the older category Walkman. This same evolution tactic made famous by Apple’s iPod successfully revolutionised the leadership battle of brands in the portable music industry.
So while market leadership is a highly coveted status, it is not impossible to achieve. All you do is find your unoccupied category; and own it. This applied science extends to all businesses in all sectors.