The Rule of Three – Surviving and Thriving in Competitive Markets

“On average, customers consider at most three choices before making a purchase.”

Surviving and Thriving in Competitive Markets

Strategies from Jagdish Sheth’s and Rajendra Sisodia’s book The Rule of Three – Surviving and Thriving in Competitive Markets.

  1. Strategies for #1 Companies (Strategies for Generalists):
    1. Be a “fast follower” in innovation
    2. Push for the adoption of industry-wide standards
    3. Develop world-class marketing and advertising through single or dual global brand positioning
    4. Use multiple distribution channels
    5. Emphasize how both low costs and product differentiation, and focus on volume over margin
    6. Grow the market
    7. Avoid dogmatic thinking.
  2. Strategies for #2 Companies (Strategies for Generalists):
    1. Innovate and differentiate
    2. Concentrate on resources for best opportunities
    3. Use guerrilla marketing
    4. Take calculated risks
    5. Promote vertical partnerships
    6. Seek out horizontal partnerships
  3. Eight Strategies for Specialists:
    1. Maintain exclusivity and product/market share
    2. Keep the specialty pure, but create subspecialties as needed
    3. Practice target marketing and avoid segment creep
    4. Offer sales expertise, great personal service, and superior experiences
    5. Shun fixed costs
    6. Create entry barriers
    7. Avoid the regional specialist’s path
    8. Control growth
  4. Strategies for Ditch Dwellers (From Ditch to Niche)
    1. Tailor unique solutions to vertical markets
    2. Simplify and reduce product lines (Think Apple, late 1990’s)
    3. Centralize organizational structure and pare down distribution channels
    4. Become a specialist in a geography where you have a strong brand equity and a position of strength
    5. Leverage brand name and distribution channels
  5. Rules of Engagement in Global Markets
    1. Shore up the domestic market first
    2. Have the right attack strategy
    3. Counterattack in the attacker’s home market
    4. Time the entry right
    5. Don’t go into foreign markets alone