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12 Feb 2016
Become the market leader

If you are the market leader, all the others wants your share of the market so everyone is your enemy. Your work is to ruthlessly defend your territory. In case your enemies are smart, they will not attack head-on. Instead, they will choose areas of weakness in which you haven't defended yourself and exploit them to their own advantage. Slowly and gradually, they will swipe your customers, take your share, disrupt your markets, and watch in amusement since your resources are scattered fighting little distractions here and there. That's what attackers do.

market leadership

Now simply because this post is about market leadership, it is just fitting that we should begin with the basics. Before we talk about what a leader has got to do, let's cover off why market leadership is definately a big deal to begin with. After all, if you don't understand the value of the market leadership position, you will not appreciate why it's so important to fight to ensure that is stays.


The reason market leadership is very important is not the revenue (although that is certainly obviously very important). It is not the status to become the leader either (although it does help build an ego). The reason why leadership is important is simply because most customers choose to buy from leaders. Obviously, you'll always have the fringe-dwellers that as some sort of protest support the underdog but, on the whole, most customers choose to deal with leaders.

So customers create management. They perceive leaders to get better (otherwise why do they really be leaders?) and so they perceive leaders to be a safer purchase. Individuals are like sheep. If the majority votes you the greatest, the majority must be right. So they really buy from where everybody else buys, thus strengthening the leader's position.

It can be hard for a challenger brand to dislodge an industry leader if the leader is actively defending territory. Resources and time have to be deployed to address over a sustained time period. Not all challengers will be in the position to attack for long periods of time since it needs a significant amount of resources to be able to relentlessly pursue a pacesetter. (It's fun though.)

But leaders aren't invincible. Some get arrogant and complacent, too big for their boots. They get distracted by internal issues like changes to senior management, or fall prey to regulatory interference, which offers challengers a timely opportunity to strike. Market leaders do slip to challenger position (and it's a bit of a bumpy ride downwards). In the event that happens to you, you'll have to switch methods to become an attacker yourself.


Between the armory enjoyed from the leader are:

Greater resources to make use of in defending a market territory.

Often leaders can outgun competitors on all fronts - outspending them in advertising, having bigger plus much more comprehensive distribution channels, enjoying higher brand profile, and much more.

Time to defend.

Since no-one listens to advertising anymore, a challenger's message can get lost. This gives the best time to respond. A frontrunner usually hears competitive messages before a lot of the market does and simply outspends the challenger.

Distribution Channels favor the marketplace Leader.

Shelf space can be a valuable commodity, and also the best positions favour the merchandise that sells from the greatest volume. Put simply, it favors the market industry leader. The same is true for distributors and third-party agents that require volume sales to earn commission.

Brand profile favors the market industry Leader.

More people buy "known" brands than "unknown" ones since positive branding instills a sense of trust. Brand profile is very important since it is the mechanism used by marketers to facilitate the selling process, along with the mechanism used by customers to reduce their purchase risk.

Coming of barriers to market entry favor the marketplace Leader.

There are numerous methods a Market Leader will make it hard for competitors, starting from the use of legal instruments such as patent protection (common inside the pharmaceutical and information technology industries) through development of market barriers such as exclusive distribution contracts, exclusive supply contracts, restricted entry to essential channels, market or government monopoly status or removing experienced staff from your market.

Using an Existing Subscriber base favors the Market Leader.

Having a customer base is always a strategic advantage, specifically if you are closely linked to them. An established customer includes a relationship already with all the brand, and has a degree of confidence and have confidence in it that it will donrrrt you have in an untried brand. Strategies can be deployed to "lock down" a pre-existing customer base, such as contracting that's common in the telecommunication industry.

The dimensions of the customer base favors industry Leader.

Large customer bases let you use the size to your benefit. Size offers critical mass. Cost advantages come with scale, including the possiblity to amortize cost across thousands. In addition, having a large usage reduces risk. Those firms that depend on one or two key customers for his or her survival can find themselves in the risky position if an individual or both of those customers place their business elsewhere.


 A market leader always plays defense.
 They counter panic or anxiety attack with equal or greater force.
 They defend important markets.
 They remain vigilant in scanning for potential attackers. (This implies they must assess the strength of each and every competitor and consider the support that an attacker might muster from allies.)
 They attack themselves before a competitor has got the opportunity to attack them.

To be the leader is the advantageous position. Playing defense is much easier than attacking because you have a greater chance of winning. However you can find key challenger brand advantages how the leader needs to consider. These advantages include:

 The sympathy vote.
 The regulatory framework.
 Psychological advantages.
 Challenger Brands are not by yourself.
 Challenger brand believability.
 Market leader complacency.

To effectively negate a challenger brand's competitive attacks, a niche leader's important territories have to be identified, defense plans laid, and strategies deployed, such as the advance of moving targets, securing fringes and niches, and pre-emptive strikes to contain competitive damage.

market leadership


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