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| Home - Industry Article - Apr 05 Issue |
Five Key Components of Market Leadership |
By Peter Gyenes, Chairman and CEO, Ascential Software Corporation
There is perhaps no greater validation of leadership than the actions of those who follow. Pick up a press release or piece of sales collateral from almost any technology company anywhere around the world today and you are bound to read the words “a leading provider of…” somewhere in the first paragraph. It is a given, and it is almost a requirement, but more often than not this four word phrase is a hollow declaration.
Marketers almost always fight one another over leadership claims – challenging each other to prove or disprove what constitutes superiority. The companies that commit this phrase to print sometimes envision leadership in terms of market share, technology prowess, human capital, speed to market, patents pending, or product features and functionality. Indeed, “leadership” is so broad and over-used today that the term has been significantly devalued – after all, almost any company can find at least something unique enough to constitute some form of leadership.
A software company may “lead” its market with the largest installed base of customers and the broadest suite of software solutions available. The numbers could be true enough; but these quantitative facts indicate the company’s size and scope of offerings. Taken by themselves, they do not really make a leader. They make the company big. They are not really the components of leadership, but rather the results of it. True market leadership is more than the sum of tangible assets or the size of a customer base.
Leaders are the companies that are setting the agenda of innovation and forging new paths for their industry. Admittedly, market leadership is risky - risk is inherent in venturing out first to the market with new products, strategies, messages and methods. Leaders can stumble: products can flop, messages can fail to resonate. Followers have the opportunity to watch and see what works and take a similar path. In effect, it is much safer and sometimes a smarter move for a company to position itself as follower – in the short term. Over the long run, leaders will shape and ultimately drive the market.
Today’s software industry is a fragmented landscape with a growing number of technologies vying for executive attention. I think the same can be said for many other market segments today. New companies promising advanced solutions for common business problems are born every day, making competition for mindshare fierce. At the same time, the technology business is increasingly characterized by customers looking for ways to cut down on the number of vendors they deal with. Leadership becomes an even more important issue in this environment where customers are paring down the number of companies they engage with.
For many of the more successful companies around today, achieving leadership in a broad but increasingly competitive market is the result of a multi-tiered strategy involving all aspects of the organization, from engineering, to marketing, to administration, to sales and support services. But, there are some key attributes that set the leaders apart from the pack across most technology markets. While there are several variables and some measure of luck involved in building a leading company, there are a few simple rules that will help lead to success. Here are five key points that those who have built market leadership would consider critical:
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