rning 40 Percent tear to eighteen rur closest com the marketPlace e market

Rning 40 percent tear to eighteen rur closest com the

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rning 40 Percent tear to eighteen rur closest com- the marketPlace e market leader' of the following 'ond 50 Percent' r buy what other ,ment's Purchases ;s some limits on rv another vendor' huu" rro chance of we must be seek- ot investing heav- on to its Problem' rn the scene' :ia, then: uy, and y any comPetitor' "';' ;i a. IN THE BOWLING ALIEY 45 Taken togetheq these two guarantee you an open field. Now the question is, how big a field can you handle? To answer this question, look at your business plan. How much have you targeted to ship all told in the next year? Let us suppose it is $10 million, just because that is an easy figure to do math with. The next question is, what percentage of that $10 million will come.from the target segment? Not 100 per- cent, I can assure you, not unless your product only works for one application, in which case there should be no near-term tornado aspirations in your future plans anyway. So let us assume instead that you realiy motivate your sales force and focus your marketing and that 60 percent of your revenue comes from your target. That equates to $6 million, which is 40 percent of $15 million, which is the maximum amount of spending in the next year your target segment can do and still have you end up the dominant supplier to it. And that's for your first target segment. As you consider your second target-and bowling alley strategy pretty much implies you have already knocked over the head bowling pin- you may expect to have even less of your total resources to commit to the new segment because a lot will still be tied up completing and extending commitments in your first niche. Hence the rule of thumb is: Dont attack any segment bigger than you are; pick on somebody your own size. Here is where companies flushed with their early bowling alley successes tend to make a serious strategic error. Feeling the momentum foom their initial segment, they underestimate what it wili take to win over the next new segment and thus ti l I 'I .: il rl I ì I underinvest in their aftack on it. ing demand for the new category it, which means it creates a market This has the impact of creat- of solution but not fulfilling for some other competitor. Now often as not, these competitors are as clueless as we and the company gets away with this mistake. Indeed, one even choose to bet that competitors are out of position to the problem, thereby allowing yourself to stretch your ACTOSS more segments lncreaslng vour vulnerabili ty also increasing the territory ca pture d if no one CA tches you tn the interim Bu t the k"y porn t to grasp here IS that you
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46 INSIDE THE TORNADO are taking a serious risk, and you should not do so lightþ oa more imPorlant, ignorantlY' The safe purÉit therl is such a thing in business-is to overinvest when invading any new segment' seeking to acceler- ate your rise to market lãadership' and then to divert resoúrces as soon as the po'i'io" is achieved' The challenge here is to have a superbly ""gi"""'"d whole product so that you can ful- fill this newly .r"o"**¿ demand wiihout having to tie
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