Business Plan

First is the aggressive leader. This position has the most risk and the most reward potential. To maintain this position, requires aggressive pursuit of the direction you set. The task is to set the industry standards, improve on them, and aggressively defend them against all assaults. You continually find new ways to keep the standards you set or to strengthen them. This keeps all others in the market chasing you just to stay competitive. On the negative side, since you are on top, everyone is trying to knock you off the mountain. Too, governments tend to attack you when you get big enough that they perceive you have monopolized the industry. This is still the most powerful business position to command. It takes a very aggressive organization and executive staff with stubborn and consistent focus on objectives. Because of your position, you establish big barriers and do all that you can to maintain them. Microsoft™ exemplifies this strategy.

Next, we have the industry powerhouse. Your position is not as strong as the leader, but your stratagems can influence the leader. A business plan for this would include plans to maintain and grow market share or position. Too, distributors and suppliers should be locked into long-term contracts to assure consistent supplies and representation. The business must be alert to changes by the market leader and you must change quickly to address new challenges. You would try to create barriers so that other businesses won't be able to move ahead of your position. Because of your position, there is a potential for great success but not as much as a market leader. A company like Apple Computer™ would exemplify this.

Finally we have the market policemen. Of the three, this is the weakest position. It has rewards although typically much less than the other two strategies. A business plan for this strategy has many differences from the market leader. Your task is to make sure that other companies in the market don't create chaos. You police the standards that the leaders set so that you can compete in niches they don't cover adequately. You defend your position by being nimble in the market and by being informed. You try to keep vendors, retailers, and distributors from taking on more companies or brands to keep your market share the same or grow it. You defend the standards and help keep entry barriers high to prevent additional competition. This is typically a niche market where you dominate some segment or create ownership of a smaller piece because you aren't powerful enough to dominate the whole thing. Computer companies that make graphics cards, networking equipment, or produce open-standard software, typically, operate this way.

As shown, the different strategies require different business plans. There exists opportunities to improve your position, but they are limited to the resources and the market barriers the leaders have constructed. There remains the opportunity to make large profits but as you drop down the scale, the market returns shrink considerably. The best choice is the aggressive leader, but it also consumes the most resources and requires the savviest leadership. In choosing, carefully consider the realistic resources your company has so that the business plan will be realistic.