Fail market

A market where the majority of volatility occurs due to the failure of incumbent suppliers to offer something more than half the market's suppliers offer.
(See also
Win Marke
, Customer Buying Hierarchy)

Example 1:

In the personal computer business, IBM surrendered market share to rivals who slashed prices more quickly. IBM's share of the PC market sold by conventional dealers in July of 1991 was 30%, by July of 1992 it had fallen to 18%. (Year 1992-SIC 3571)

Explanation: IBM "failed" because it did not match the declining prices in the market place quickly enough to keep its customers from defecting to other suppliers.

Example 2:

The insurance industry, in the early 1990s, pressured auto body shops to use cheaper parts. Several independent car part producers had gained a foothold in the market place by offering very low prices. Eventually Ford slashed prices on replacement parts to fight competition from the independent parts producers. (Year 1990-SIC 3465)

Explanation: The major automobile companies, such as Ford, "failed" their customers on pricing when the independent car part producers offered lower prices.

Example 3:

In the late l980s, Cummins Engine Company introduced a new line of engines that were riddled with flaws. As a result, rival Detroit Diesel snatched market share it has never surrendered. (Year Late 1980s-SIC 3519)

Explanation: Cummins Engine "failed" its customers with defective product. Detroit Diesel, when it gained market share after the failure of Cummins, had a "Weak Win."

Example 4:

In 1988, Briggs & Stratton's largest customer slashed orders for small engines by 45%, and for riding mower engines by l0%. The customer was fed up with rising prices and moved a substantial part of the business to Tecumseh. (Year 1988-SIC 3524)

Explanation: Tecumseh appears to have "won" on the basis of its low prices. However, if Briggs & Stratton had been offered a "last look" to match Tecumseh's price, then Briggs & Stratton would have "failed" and Tecumseh would have had a "Weak Win."

Example 5:

Zenith Data Systems developed a new distribution policy designed to boost sales of its desktop computers. It required its laptop dealers to sell Zenith's unpopular desktop personal computers. As a result of this new policy, more than 1000 dealers, including big chains like Computerland, simply dropped Zenith computers all together. (Year 1991-SIC 3571)

Explanation: Zenith Data Systems "failed" its defecting dealers.