My weekly journals and readings follows a particular trend. The readings focus on an aspect of business of which I apply (shoddily) to my my journal and work in Mikesbikes. This weeks a little different. A small slice of a side note in Baghai, Smit and Viguerie's 'is your growth strategy flying blind' reading really caught my attention. It said (excuse the long-winded quote) "Companies can grow in three basic ways: by gaining market share, by participating in fast growing markets and by acquiring or merging with new businesses... The weakest contributor is market share – ironically, the area that traditionally commands the most management attention." (p 89)
This week in management 300 has been a distinctive one for me - amongst a plethora of stressful meetings and disastrous rollovers throughout the semester, this one takes the cake. Not so much for its lows but more for the questions it asked and answered for me. This week was distinctive in three ways.1. Our market share reached a truly intolerable low. 2. We were 'offered' a specific slice of the market (should we be acquired by another group) and 3. We were taken over by another company. Throughout Mikesbikes I have been slowly watching my teams market share be whittled away, quietly fuming and feeling helpless at the same time. Imagine my surprise at reading that market share is the weakest contributor to growth! That cant be right can it? Market share represents POWER, it represents DOMINANCE, it represents the SUCCESS that I have been striving for. It has so often in the past been held up as a measure of success that its effects on growth are not questioned, not by the likes of me anyway. The word itself carries a taboo, it is sacred and cherished and it became what myself and my team most desperately (and perhaps blindly) seeked.
Is this what has lead us to such a disastrous situation? Perhaps, for my team and I, we find ourselves in a hole. So focused have we become on gaining market share, we have failed to create what Baghai et al calls a granular understanding of our market. Our obsession with 'the broad picture' - ironically - appears to have made our image fuzzy, the fuzzy part being our position in the market. We failed to recognize both our own markets pattern of decline, as well as potential of other markets for growth. I believe we became so focused on survival, we failed to understand the basis of business - that of a differentiated product.
At this stage it is important to remember we have two options of growth still open to us. Having been taken over by another company, we await the aforementioned slice of market that has been waiting for us, unrecognized, for the past 5 weeks of the simulation. Here is an opportunity to create real growth with a focus not on market share but on market strategy. Being taking over is a blessing. At one point we were asked "are you sure you don't mind being taken over?" At the time I was somewhat apathetic but now, now I recognize the blessing in disguise as we try to salvage some pride from the final two rollovers.
Baghai, M., Smit, S., & Viguerie, P. (2009). Is your growth strategy flying blind? Harvard Business Review, 87(5), 86—96.