Every company must develop a strategic direction that best fits its capabilities and its standing in its marketplace. Most business categories fall into similar market share patterns. There are three major players who, combined, have roughly 70-90% of the market. Then you have a group of small savvy specialists that have identified an underserved audience within the market. These tend to be businesses that succeed based on lower volumes, by definition, but much higher margins. In general, they tend to have no more than 5% of the market each. And, finally, you have the remaining companies in the category that live on the crumbs that are left over.
Grow or die. Grow wrong and die a slow death. Every CEO is faced with the challenge of ensuring results today, this month, this quarter and this year. And everyday tradeoffs need to be made. For example, how often does the CEO get requests for discounting? And when the company responds to these short-term opportunities to secure a big order, how will it limit any negative impact on the long term pricing strategy?
How is it that some business leaders can take all that stuff we study and work on regarding business leadership and strategy and make it sound so straight forward and simple? Recently I attended a “Conversation with Jamey Rootes” at the Business Leadership Council meeting of the Greater Houston Partnership. Jamey Rootes is the President of the Houston Texans, the 5th most valuable sports franchise in the world.