Leading-Edge Markets

Leading edge means exploring markets by making minor penetrations into a competitor’s territory. The intent is to investigate the possibility of opening another revenue stream. Therefore, you want to acquire the following types of intelligence:

The feasibility of the market to generate a revenue stream over the long term; and if possible to grow into additional niches.

The amount of investment needed to enter and gain a foothold in the market and then expand to secure a profitable segment (see the section above, “Identify a Decisive Point in a Market Segment”).

A time frame for payback and eventual profitability.

An assessment of competitors: their market positions, strengths/ weaknesses, decisive points, and the nature of the opposition you will likely face.

A classic example of a leading-edge market is the initial penetration by a few Japanese companies into the North American market with small copier machines. Xerox, the market leader in those early years, concentrated its marketing efforts at large corporations with a line of large copiers.

Xerox managers initially avoided the small copier market. That oversight proved to be a critical error. Armed with a low-cost, no-frills desktop copier, enterprising Japanese copier makers found their decisive points and moved in virtually unopposed and exploited a wide-open opportunity in the vast market of small and mid-sized firms. Once established, they moved upscale in a segment-by-segment assault and took over a significant amount of Xerox’s primary market share.

The major battle must always be considered as the true center of gravity.


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