Niche warriors

Hi,

The minnows in any market can't play Leader or Challenger roles. Instead the small player can fight a guerilla war, with hit and run raids on market niches that offer margins until the Leader blocks by entering and using predatory pricing to drive the guerillas out. Leaders who don't see the threat can allow a guerilla to get a foothold, forming a base for an assault on the market proper. IBM was once offered DOS, the operating system for personal computers, but they turned it down. The offer came from a young Bill Gates who had a vision of a computer on every desk in an era when mainframe computing dominated. Software was a tiny niche which Microsoft was left to establish. Microsoft nearly fell foul of the same "Leader's Blindness" re the Internet, leaving Netscape to dominate the browser market until the software giant was forced to use its monopoly power to establish Explorer as market leader. (The US Federal Court eventually forced Microsoft to decouple the browser from Windows.) IBM also left Intel to run away with the memory chip market. IBM's strategy was built on a vision that its founder had of a total world market for computers of around 30! IBM has survived by strong corporate focus and by dominating the emerging IT services market.

Cheers!

Michael Kiely