Can you dominate in 2014?

Posted by Leonard Fuld on Jan 2, 2014 10:00:00 AM

Now that is a loaded question! Dominate? No corporate counsel in his or her right mind would use that word in any correspondence concerning the company. Dominate is a word that can trigger anti-trust inquiries. Is that really how you want your company to begin 2014 with an anti-trust investigation by the American Department of Justice? I don't think so.

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You can relax because I am asking this question in a totally different context and that is in the way game theorists use the concept. For anyone who has played in the world of game theory knows a company should always apply its dominant strategy. That is because game theory states that "dominant strategy" means the dominance or strength of one of your firm's strategies over another – and not how you will dominate an opponent. Rather, it emphasizes how you need to play your strongest hand whenever you consider various strategic options.

Nearly every company has a dominant strategy. For instance Amazon’s online strategy will always be stronger than its retail strategy. Even though it has decided to plant storage lockers in local shops for direct store access to customers, its online shopping experience will remain its dominant strategy. Dell's customization of its laptops and online ordering system dominates its retail strategy – even though it now has an increasing retail presence via kiosks and displays at Best Buy and the like. Apple, on the other hand, offers a relatively simple online shopping experience with most of its online platform dedicated to selling content, not hardware. Apple's dominant strategy for selling hardware is through its high-concept retail stores. While Dell may not win more share in the market via its online ordering system, that remains its dominant strategy. Dell's battling Apple on the retail front will not be in Dell's best interests. Retail sales are not Dell's dominant strategy.

The list goes on and on. Every company in every industry has a dominant strategy, from financial services to life sciences and more.

You need to use your dominant strategy to at least maintain or eventually win in your market. You may not dominate a market with your dominate strategy but you will have the best chance at winning the most share or greatest margins by doing so.

Topics: Competitive Intelligence, Consumer Goods, Product Roadmap, Win/Loss/Bid Support, Financial Services

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