The industry leaders are losing share

Symptom: Several of the industry's top competitors are losing share to smaller competitors.

Implications for the market:

  • In the average hostile market, competitor failure is responsible for the great majority of all share moves. Superior product or service benefits are responsible for only minor share shifts.

  • When the largest companies in any market fail their customers, large amounts of share are available to other competitors, since these large companies are usually the primary suppliers to the highest volume customers.

  • The failure of large companies gives new, smaller companies an opportunity to emerge as leaders. Smaller competitors who are performing to market expectations and who are well positioned in relationships with customers being failed by their primary suppliers are likely to gain share rapidly–more rapidly than if they were in a stable customer relationship. The relative strength of competitors in the market then shifts.

Recommended Reading
For a greater overall perspective on this subject, we recommend the following related items:


Perspectives: Conclusions we have reached as a result of our long-term study and observations.

  • "Building On Customer Volatility" In one crucial respect, hostile markets are actually more stable then non-hostile markets. During market hostility, share shift slows.

  • "Is Bigger Really Better?"In the average large industry, the market share leader is only slightly more likely to lead the industry than is any one of the next three competitors in the industry. Market share leaders often fail to become return leaders because they serve some customers who yield low returns and rely on size alone to create economies of scale.

  • "The Real Reason Market Share Matters" Market share does count, but for more than the reasons thought previously.

  • "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.