The classification of competitors according to their ability to fill roles with different Customer Sizes. Tier I competitors tend to fill Primary and Secondary Roles with Very Large customers and Primary Roles with Large customers. A supplier achieves membership in a tier by proving, through its presence in customer relationships and its mix of business in alternative roles and particular sizes of customers, that it can compete on equal terms with other members of the tier.
(See also Peer)

Example 1:

With over 40 million people a week tuning in to a Chancellor station, the company should be able to command a larger share of the national advertising pie. (Year 1997-SIC 4832)

Explanation: Chancellor is able to offer a national advertiser national presence, which makes it a Tier One competitor in the industry.

Example 2:

Microsoft is getting customers to consolidate software usage by bundling spreadsheet, graphics, email, and word processing programs into Microsoft Office. (Year 1992-SIC 7373)

Explanation: Microsoft was the only company to integrate all of these programs so that they worked well with one another. This made Microsoft a Tier One supplier for major businesses in the personal computer software market.

Example 3:

The top 50 metropolitan newspapers have formed a large group in order to offer advertisers the ability to purchase national ads from one source. Newspapers are competing for ad dollars against television and magazines. (Year 1994-SIC 5192)

Explanation: Newspapers have been Second or third Tier suppliers to national advertisers because of their limited market coverage. This is an attempt by the larger newspapers to join the first Tier of advertisers, by offering the ability to produce a national ad purchased from one location.

Example 4:

Bosch is doing well in Germany, but poorly in the US since Japanese competitors shut them out there. When the Japanese built factories in the US, they brought most of their suppliers with them. In Europe, the Japanese depend on European suppliers. (Year 1991-SIC 3465)

Explanation: Bosch failed to establish relationships with the Japanese firms that are strong in the United States. Bosch then became a second Tier supplier in the United States while being a first Tier supplier in Germany.

Example 5:

Fastenal is the only full-service fastener distributor that operates on a national basis. About 60% of Fastenal's sales come from original equipment manufacturers and customers in the maintenance and repair market. (Year 1995-SIC 5200)

Explanation: Fastenal has the ability to serve a Very Large customer nationally. This qualifies the company as a Tier One competitor in its industry.