Products and Services

New entrants are growing much faster than the market
Low end products are gaining share of the market
Price points are growing at differential rates as companies enter higher end niches to improve profits
Companies are trying to create upscale niches
Some competitors proliferate products around the heart of the market
One or more companies have introduced a better product at a lower price
The larger companies are squeezing out the smaller

Products and Services/Performance Innovation Symptoms:

Leaders Stress Quality to Offset Competitors' Lower Prices
Competitors are changing features of the product
Product innovation has accelerated
Competitors are emphasizing reliability in product quality
Some competitors have formed partnership services with their channels of distribution
Competitors are improving the product by emphasizing the customer's purchase process
The level of convenience offered to customers has increased
Competitors are aiming their marketing at narrower segments
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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.