RESULT OBTAINED
Canonical method
Competitive postures: attacking, following or specialising against the leader
What must be established
A useful analysis keeps its controls visible.
- 01
Measure the share relative to the leader on a defined market and a defined period.
- 02
Document the leader’s capacity and motivation to retaliate: resources, dependence on the ground targeted, observed precedents.
- 03
Choose a ground, accept a named risk and write down the matching renunciation.
Decision reference
Make the next choice more explicit.
DECISION SUPPORTED
Faced with the market leader, should the company attack, follow or specialise, and on which ground?
DELIVERABLE TO KEEP
A posture memo linking position, ground, expected retaliation, accepted risk, renunciation and review signal.
NEXT ELEMENT TO EXAMINE
Porter’s generic strategiesExplore →Why second place does not require an attack
Rank does not dictate conduct. Being second in a market may mean sitting close behind the leader or weighing three times less, and those two situations do not allow the same moves. Relative share, meaning the company’s share divided by the leader’s, says more than the ranking: it shows the effort needed to move the frontier. Added to this is the nature of the resources that can be committed, not those available once, but those the organisation can sustain for as long as the confrontation lasts. An attack funded by an exceptional budget stops when the budget stops, and the ground won returns to the leader along with the customers. A posture therefore describes a chosen place in the structure of the market: defending what is held, attacking a position held by another, following without provoking, or specialising on a segment that the large players serve badly. None is superior; each one has a cost and a renunciation.
- Relative share
- Sustainable resources
- Chosen place
- Cost of the posture
Reading the leader’s retaliation before choosing the ground
An attack is judged not by what it yields if it succeeds, but by what the opponent can and will do to prevent it. Two separate questions: does the leader have the means, and is there a reason to use them here? The means are read in its resources, its production capacity, its distribution network and its cash position. The motivation is read in its dependence on the ground targeted: a segment that is marginal for it will be defended weakly, a segment carrying its margin or its reputation will be defended hard. Its precedents tell more than its statements, because a company that has already broken prices to protect a territory will do so again. A simple rule follows: one attacks where retaliation is slow or costly for the leader, not where the gain looks largest. When retaliation is fast and cheap, following or specialising protects resources better than an announced frontal attack.
- Means of retaliation
- Motivation on the ground
- Observed precedents
- Chosen ground
Writing a revisable posture: ground, accepted risk, renunciation
A posture is worth something only if it is dated and revisable. The memo that carries it holds the reference market and the period, the relative position observed, the ground retained, the mode of confrontation, the accepted risk and, above all, the renunciation: what the company stops aiming at in order to hold this posture. A posture that gives up nothing is not a posture, it is an intention. To that are added the threshold that triggers a stop and the signal that would force the choice to be reopened: entry of a new player, a change of rule, retaliation harder than expected, loss of the reference segment. This writing avoids two symmetrical drifts: persisting in an attack that costs more than it returns, and abandoning a specialisation at the first difficulty. It finally allows the next review to compare what had been planned with what has been observed, rather than starting the debate again from the beginning.
- Ground and period
- Accepted risk
- Named renunciation
- Review signal
DECISION ASSET
Posture note facing the leader
The posture retained is linked to the relative position, to the likely retaliation of the leader, to the ground chosen and to the renunciation accepted.
Position
- Input
- Share relative to the leader
- Control
- How wide is the gap?
- Output
- Observed role
Retaliation
- Input
- Means and motivation
- Control
- Will the leader defend?
- Output
- Workable ground
Commitment
- Input
- Sustainable resources
- Control
- Sustainable for how long?
- Output
- Accepted risk
Renunciation
- Input
- What is given up
- Control
- What is abandoned?
- Output
- Review signal
- Hamermesh, Anderson and Harris, Strategies for Low Market Share Businesses, Harvard Business Review, 1978 (opens in a new tab)Study of durable minority positions: chosen segmentation, frugality and renunciation of the race for volume.
- Buzzell, Gale and Sultan, Market Share, a Key to Profitability, Harvard Business Review, 1975 (opens in a new tab)Historical reference on the link between relative market share and profitability, and on its limits.
MOVE FROM ANALYSIS TO YOUR DECISION
Produce a testable decision mandate
MOVE FROM ANALYSIS TO YOUR DECISION
Produce a testable decision mandate
RETURN TO THE DECISION SYSTEM
See the canonical definition of marketing strategy→