Some Ideas for Differentiation in Your Industry Type

Some people will tell you that differentiation is only for rapidly growing sectors. That’s not true. The fact is, you can bring a new product to market profitably in any of the five following industry types:

  • Emerging industries

  • Maturing industries

  • Stagnant or declining industries

  • Fragmented industries

  • Leader - dominated industries

And here are some strategy ideas for each industry type


Emerging Industries – they spring up quickly, attracting attention and investment in the early phases.

  • Create a bold, win-early strategy – quickly make your product the standard that consumers want.

  • Super-serve niche markets – create something for a market that is too small to interest bigger companies.

Maturing Industries – demand has slowed; there is excess supply and international competition.

  • Create something for major customers – you can service large customers more efficiently than smaller customers. It’s also easier to maintain price competitiveness with large customers.

  • Expand to new markets – Look for less saturated markets with customers who are not using products or services in your category. Create something just for them – an example is the $100 laptop created for Third-World countries.

Stagnant and Declining Industries – there is either no growth or the industry is shrinking.

  • Focus on a niche with growth-potential. You’ve heard this before: The definition of insanity is doing the same thing over and over and expecting a different result. But it’s not always true. You can often do the same thing you are unsuccessfully doing in your market very successfully in another market. So find a market that doesn’t need your product and create something similar that it does need. For example, if you’re currently designing and manufacturing exercise shoes, design exercise shoes for pregnant women.

  • Innovate – the staler your industry is, the more you should focus on innovating, not just differentiating – go for the bold move.

Fragmented Industries – there are many businesses – none of which has a large market share.

  • Focus on a local market – create customized products and services.

  • Franchise – create a simple, standardized, no-frills business model that can you can easily replicate.

  • Specialize

Industries with Dominant Leaders – one or two behemoths have a lock on the market.

  • Focus on long-term differentiators – leaders, forced to focus on quarterly profits to appease shareholders, have less ability to look for long-term trends and invest in long-term projects. Seek out and capitalize on anything both forward looking and long term.

  • Take advantage of your superior market knowledge – since smaller companies are closer to the ground, they often see the market better than larger companies – consider products and services geared to an under-served market.

Look at the negatives of your industry type and think about the opportunities they create. For example, a declining growth industry is inherently a volatile industry. With a sharp eye, you’ll see gaps opening up as businesses either exit the industry or streamline their offerings.

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