How a company goes after market share depends on the market's maturity -- and how much growth is left in it Dear Bob …You’re probably tired of the discussion of whether markets are always finite or not (“Does a business win when its competitor loses? Absolutely” and “Does competition always have to be zero sum?” Advice Line, 7/10/2009).[ Also on InfoWorld: “Does a business win when its competitor loses? Absolutely” and “Does competition always have to be zero sum?” | Get sage advice on IT careers and management from Bob Lewis in InfoWorld’s Advice Line newsletter. ] You are, of course, right that every market is theoretically finite. My question is, does this matter? Seems to me, companies in fast-growing marketplaces have a very different set of challenges from companies in slow-growing or mature ones.What do you think?– Trying to clarify Dear Clarifier … I couldn’t agree more, and only wish I’d had the sense to make that point. Every market is finite, and companies that want to be around for the long haul should know how they’ll handle the transition from rapid growth to marketplace maturity.That doesn’t mean they should act the same way during the two very different situations. Before diving into the specifics, an example to illustrate why this is important: word processing software. Way back when, during the days of PC DOS, people who wanted to buy word processing software had easily a dozen alternatives available to them. The various companies pursued a variety of business strategies. For example, XyWrite focused on configurability, clean architecture, speed, and compatibility with the Atex publishing system; IBM focused on selling through its strong client relationships; WordPerfect focused on supporting the corporate marketplace; and Microsoft focused on selling a full office productivity suite, also to the corporate marketplace.One hallmark of a maturing marketplace is consolidation. WordPerfect and Microsoft won, for three reasons:They recognized the criticality of market share and focused on it more than anyone else.They and IBM understood that most growth would be through corporate buyers.Unlike IBM, they realized that PC buyers weren’t participants in the IBM relationship — quite the opposite, they were rebelling against it.So when the marketplace started to consolidate, WordPerfect and Microsoft were the two players left standing — the two with the biggest market share, which made them the logical choices to replace the other vendors as they started to fall away or lost credibility. What this means to any company that finds itself in a growing marketplace is the importance of making market share its central strategic goal. It’s the old “one, two, or out” rule Jack Welch made famous at GE, with this added: During the period of rapid marketplace growth, companies should generally be willing to sacrifice margin for market share. This doesn’t mean selling at a loss (although sometimes even this makes sense). It does mean selling at a discount if that’s what’s needed.Any company that doesn’t see a reasonable possibility of being one of the top layers during the period of rapid growth should choose one of three alternatives:Find a buyer and cash out.Find a protectable niche within the marketplace where it can be number one or two.Figure out what it’s good at and that positions it well to develop and launch a new product that creates a new marketplace, milking the old product to fund the new one without investing much more in it.One more point: The selling strategy during a period of market growth is very different from the selling strategy when the marketplace matures. During the period of rapid growth, every company’s biggest competitor is “do nothing.” This means a healthy part of the sales argument needs to focus on the value of the product category, although emphasizing “best in class” still matters. It would have done IBM little good to persuade its clients to buy a word processor without also persuading them that DisplayWrite was the one they should buy. In a mature marketplace, the biggest competitor is generally “stay with what we have,” so the emphasis is entirely on “best in class,” whether it’s through unique positioning or on overall quality and excellence.I realize this subject is largely academic with respect to the day-to-day work of the typical CIO. Still, CIOs are, as business executives, involved in developing and implementing the company strategy, so the subject is worth some time and attention.– Bob Technology Industry