Eating other people's lunches
Posted by Ian Holsman
source: The Friction Free Economy
There are four basic strategies to fight a dominant market leader.
Brute force
Attack the market leader through an aggressive attack on several fronts
- beat price-learning curve
- branding
- tailoring (to the market of one)
- volume manufacturing
- execute Davidow’s law (beat them to the market on the next round, and gain the lead when you obselete their product)
Momentum
Find a weak spot, gain a foothold and build takeover momentum
- joint ventures
- mergers and acquisitions
Anti-Monopoly
Get third parties to help destroy the leadership position through monopoly
- target the weak
- lobby government
- litigate
Pure Play
Consistent execution of a strategy over a period of time- hit shooting range targets
- introduce chaos into marketplace
From what I can see recently on the net, Google appears to be playing more ‘pure play’ than ‘brute force’ with it’s gmail, gtalk, froogle, and news sites, while murdoch and microsoft are more into ‘momentum’ plays buying established companies with existing market shares.
the other interesting saw in my class yesterday (not from the lecturer, but googling while being bored) was about The New Lanchester Strategy. Which theorizes about how different market share sizes in the overall market affect the market itself.
So according to the new Lanchaster strategy I would think Technorati (which I would estimate would hold 30-40% market share) should merge with a smaller player of slightly smaller size to control 73% of the overall market, in effect controlling it. Making it much harder/expensive for other players to enter.
you can also look at this in the web-mail (and messenger) area, where hotmail & yahoo have an order of magnitude more subscribers than gmail. I would love to see how the new guy on the block plans on breaking that. Right now all of gmail’s new innovations are being implemented in hotmail and in yahoo.. I don’t think that google is going to have a slam dunk in these areas, unless it can provide another compelling reason to switch over.
(oh.. please don’t take me as anti google or anything, it’s just that they have shaken up several markets and I can apply some of the stuff I learn in the books/classes to them)