Beyond the more conventional techniques listed above, there is an advanced procedure that uses a strategy-driven approach to selecting a market segment and concentrating at a decisive point. The technique consists of classifying markets as natural, leading edge, key, linked, central, challenging, difficult, and encircled. Using these eight categories as a guide, you can look with a more critical eye at what challenges you will face. Then, you will be better able to assess the risks and potential rewards when selecting your strategies. As you examine the characteristics for each market category, you may find some overlapping. That is acceptable as there are inherent commonalities among the various markets.

Generally the best policy is to take a state intact; to ruin it is inferior to this.

Sun Tzu

Natural Markets

In this type of marketplace, you operate in the familiar setting of your established markets. The implication is that within such customary surroundings, personnel tend to be at ease and may not be motivated to venture out of their comfort zone.

Yet, to expand, you have to motivate them to move beyond the confines of existing markets. That means you should get back to the issue of your organization’s culture. That is, does your organization’s culture permit venturing out of familiar territory?

For the most part, in a natural market, you and your rivals have learned to adopt a live-and-let-live policy—“to ruin it is inferior to this.” That condition exists as long as each company sticks to its own dedicated segment. Generally, outright aggressive confrontations are seldom used.

The primary reason for this uncharacteristic display of togetherness in a highly competitive world is that you and your rivals share a common interest in furthering the long-term growth and prosperity of the market.

On the other hand, if any one competitor chooses to move forward and gain a meaningful benefit, here is where you have to decide on your goals. If your aim is to check the expansion of the competitor, then you have to look for your possible comparative advantage in Table 3.1. How aggressive you choose to be entails looking at your strategic viewpoint about maintaining stability in the marketplace.

There is one additional dimension that characterizes this category, which you should actively keep in the forefront of your thinking: Industries, markets, and products go through successive life cycle stages of introduction, growth, maturity, decline, and phase-out. Much of the movement through these stages is driven by the rate of adoption of technology, which can affect changes in consumer behavior.

There are also variations triggered by legislative issues and the current trends about the environment. Unless there is an industry-wide movement to deal with such concerns, these are generally beyond your ability to control. Therefore, your best course of action to sustain growth is to take the lead in searching for new niches in which to concentrate.

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