Strategies & Analysis
A Market Leader
in a well-defined
market segment
is a company
that has attained
a Value-Volume
of 20 percent
greater than its
next strongest
competitor.
by Phil Phillips, PhD
Contributing Editor
phillips@chemarkconsulting.net
In the parlance of the military, as business
leaders, slash marketers, you always want to
take the high ground position in a given industry or market... well, sometimes.
For simplicities sake we will use the
Michael Porter LEADERSHIP segmentation
chart as the basis for this discussion of HIGH
GROUND positioning.
By Porter’s well conceived logic, a Market
Leader (ML) in a well-defined market segment
is a company that has attained a Value-Volume
of 20 percent (or more) greater than its next
strongest competitor. This ML not only has
the highest volume but it maintains the highest profit margins, sets the tone in innovation,
pricing, promotion and brand recognition for
the segment. The ML is placed on the “high
ground” say, a mountain, and must work
smart and hard to stay there in any dynamic
market segment.
Porter considers a market segment that
has no ML by his definition, is leaderless and,
therefore, unorganized market, resulting in a
confused segment direction and consequently, a
lower profit segment.
Within an “organized” market segment the
ML usually “controls” that segment in many as-
pects of doing business such as . . . . price levels,
innovation, service, cost and can play differ-
ent tactical games with its Market Challenger
(MC) competitors in this market and in a given
market space. There are four of these tactics as
mentioned below:
• Offensive... Market Challenger’s central
tactic
• Defensive... Market Leader’s central tactic
• Flanking... Market Leader, Market Nicher
& Market Challenger tactics
•Guerrilla... Market Follower’s central
tactic
As a ML a company it could chose to be-
come offensive and go directly and aggressively
at its’ Market Challenger (MC) competitors in
a toe-to-toe battle. However, this offensive tac-
tic would be absolutely WRONG!
A ML should never take an offensive tactic,
instead a ML should be defensive in its dealings
“Who Should Play on the High Ground?”
