Monday, March 17, 2008

A message to the industry leaders

In today’s competitive marketplace, organizations with dominant industry positions can surrender the lead to competitors that push the boundaries of creativity. Throughout the twentieth century, companies in different industries emerged as leaders with seemingly impenetrable market positions—only to find that smaller competitors were not content with second place. With unconventional thinking and industry foresight, the challengers to the status quo battled the industry leaders for marketplace supremacy. Industry giants such as IBM, Xerox, and GMC seemed invincible until smaller competitors such as Dell, Canon, and Toyota brought new ways of thinking to the marketplace. With new challengers to the throne, different tactics were required to launch an assault on the established leaders.

With fewer resources and smaller market positions, the challengers needed to penetrate each stronghold by deviating from convention. Dell decided to manufacture and sell computers directly the consumer, Cannon decided to target a market Xerox ignored, and Toyota adopted lean manufacturing methods. The results were stunning. Organizations that once peered down from the summit of particular industries were overshadowed by more aggressive and innovative organizations that found gaps in the strategies of the world’s most powerful companies. The message is clear and simple: sustaining leadership in today’s marketplace is an ephemeral proposition. With relentless pursuers looking to share the profits in attractive industries, market leaders must continue to widen the gap—not merely protect the lead.

As the global marketplace continues to intensify competition, it important that industry leaders reevaluate corporate strategies and marketplace offerings on an ongoing basis. In other words, all industry leaders must make sure there are no gaps that can be penetrated by competitors that are more willing to offer customers exactly what they want, when they want it, and how they want it. The marketplace is changing—and customers are demanding more and more with every passing day. Keeping in touch with changing customer demands is the prerequisite for giving customers exactly what they want. The companies that emerged victorious against the giants must continuously reinvent themselves in order to maintain the market share they've taken from the leaders. It’s an ongoing struggle that never relents. As the lessons of history illustrate, complacency does not bode well for the market leaders. With marketplace strongholds vulnerable to the creativity of outsiders, executives must lead with a relentless pursuit of redefining the industry in which their organizations compete—or prepare to surrender the lead by an unexpected challenger.