Customer Segments Symptoms:

 

Some customer groups are growing faster than others

 

The market structure is changing as shares shift in the channels of distribution

 

Some companies in the industry have begun to replace their direct sales forces with independent distributors (or vice versa)

 

Fast growing competitors focus on the industry's large customers

 

Large customers are getting higher discounts

 

Medium sized customers are under pressure from both their larger and smaller peers

 

Distribution channels are undergoing a shakeout

 

Competitors are upgrading their channels of distribution

 

Industry customers are forming buying groups

 

Customers are consolidating their purchases

 

Customers are adding suppliers because incumbent suppliers failed them

 

Customers are taking on more suppliers because shortages have appeared

 

Customers are making significant changes in their supplier arrangements

Competition Symptoms:

 

Share is tougher to shift

 

New entrants are penetrating the distribution channels of the industry's leading competitors

 

Most share shifting in the industry seems to be coming from volume gained within existing customer relationships rather than from new customers

 

The industry leaders are losing share

 

Competition is beginning to focus resources on market segments as market growth slows

 

Competitors in Formerly Underdeveloped Markets Have Begun Meeting One Another

 

While still growing some competitors are losing share

 

>>More Information for Non-Subscribers

Back to Symptoms and Implications Home Page

List of All Symptoms

 

RELATED LINKS

 
 

Over the years, we have written a number of Perspectives that cover a broad range of subjects in deteriorating and hostile marketplaces. We recommend that you review some or all of these articles before undertaking extensive analyses or delving deeper into the other Perspectives. These broad discussion Perspectives add important context to the Analyses, Symptoms and Implications and to the other Perspectives. These general articles include:

 

"Use Subtle Strategy in Tough Markets"A hostile market operates differently than a market with "normal" competitive conditions. But as difficult as a tough market can be, it can also present an astute management team with an unusual opportunity.

 

"Rare Mettle: Gold and Silver Strategies to Succeed in Hostile Markets"Managements of winning companies have common themes for success in hostile markets. They each follow five basic themes. While virtually all successful companies are aware of these themes, their implementation differs according to their market position at the onset of hostility.

 

"Staying Alive in a Hostile Marketplace"A few companies survive and even prosper during periods of hostility. How do these companies avoid being the victims of tough market conditions?

 

"Success Under Fire: Policies to Prosper in Hostile Times"A hostile market evolves through six predictable phases. Most companies fail, withdraw or become acquisitions before this evolution is complete. They fail because their management policies were not effective. The few who survive and prosper do so by making decisions that follow two rules: attract customers and discourage competition. Losers lose by not following the second rule.

 

"The Wisdom of Salomon"In the late 80s', the investment banking firm of Salomon Inc. decided to leave the municipal bond market - a market the firm had lead. This withdrawal showed just how limited management's options are when a market goes into overcapacity and how the best choice under such conditions may be the painful decision to leave the industry.

Improve the Business. Use the experiences of thousands of other management teams and situations to provide you with brain-storming ideas to make your business perform at a higher level:

Segment the Market. Develop ideas for new customer segments for your business based on the characteristics of the customers as buyers and users and on customer group differences due to location and time.