Strategies & Analysis

with the Market Challengers. A ML should obliquely compete with the MC’s by developing unique new products; new systems; new service techniques; new production approaches, etc. in tactics that continue to keep it ahead of the MC’s, but never go on direct offence with them.

An sustainable offensive conflict is what a MC must do in reducing the ML’s position in Share-Of-Market strength.

An example of market spaces where the ML does not use offensive tactics to compete is the so-called social media space. Facebook and LinkedIn are market leaders in separate markets . . . . Facebook in Social Media and LinkedIn in-Professional Media, respectively. At this point in time neither company is overtly trying to compete in the others’ adjacent space. So, one would conclude that both Facebook and LinkedIn are MLs in their respective spaces.

Another example would be the major appliance so-called “white goods” segment. Whirlpool Corporation several years ago was a MC to GE, the Appliance ML. Whirlpool concluded that it could not organically grow and move fast enough to overtake GE in this space. To overtake GE it must acquire, however, its acquisitions needed to be in the Market Niche (MN) space where profits and brand recognition was exceptionally strong and the volume was reasonably high and the product output efficient.

Here are the familiar brands Whirlpool
has acquired over the past 15-20 years:
With no exception, these mentioned
acquisitions were all independent Market
Niche companies with major brand eq-
uity and very high profit margins versus
both Whirlpool itself and certainly GE.

Whirlpool is now
considered the global ML at
$21 billion in sales revenue
in 2015

As in these examples, assuming the ML is sitting on the High Ground it can fend off MCs provided it has the best offering in a given market. The MC attack space is where the ML is weak. What the ML owns is a position in the minds of the customer base. At the MC level in the valley of the power diagram, to win the battle of the mind, the MC must take away the ML’s position before a substitute can be positioned. In other words, find an inherent weakness in the ML’s strength and attack at that point. It’ not enough for you to succeed, the ML must fail in some critical portion of its offering.

A marketing Flanking tactic is basically a daring option. More than any other form Flanking demands an intimate knowledge of the other competitors involved and an capability to visualize clearly how the encounter will unfold after the tactical launch is made.

Success in a Flanking tactical plan must be made into a uncontested area.

A Flanking tactic does not always
demand a new unique product to the
market although, it is one method of
out-flanking the ML. However, success-
ful flanking does require an element of
exclusivity. The offering must place the
MF into a new category within which the
ML does not occupy. Flanking is not for
the faint-of-heart. It is a gamble with the
possibility of a large payoff or an equally
big loss.

Years ago, in the Automotive segment and Body-In-White primer application, PPG out-flanked Inmont/DuPont (the ML) by innovation and systems value-selling/marketing its new Electrocoat dip primer system, for example. PPG took a BIG gamble.

As the PPG example indicates, the success of a market Flanking tactic hinges on the flankers’ ability to create and maintain a separate category. They did!

In Guerrilla tactics, as in warfare, a market segment player (normally the Market Follower – MF), finds a sub-seg-ment of the overall market small enough (in volume or geography) to be placed in the shadows of the ML or MC defenses or in some other aspect, in a position difficult for a larger company to justify attacking.

In Guerrilla tactics one such tactic that must be first recognized and second avoided is the “line extension trap.” My father was a Packard fan. In the fifties, Packard introduced the Packard Clipper, a low-priced version of a high-price car. Guess what . . . the cheap cars sold; expensive ones did not. Not too long after, Packard faded into automotive history.

So, pick your fights carefully by memorizing the rules of each possible alternative strategy and using them. Remember, there is good money to be made at any point on the Porter Power Chart. CW