To fight the commodity trap, GE realized that the only way to do that was to be the best in a market. For this reason, General Electric appliances mandated every business unit be either number one or number two in their market. Many succeeded, but these high market shares started to trigger very defensive behavior of many units.

DEFINING AND DEFENDING THE CURRENT MARKET

Your market share is defined by your revenue and the value of the entire market. But how would you define your market? By defining their current market too narrowly, GE managers limited their ability to identify new opportunities that are outside your narrow definition. The old strategy became ineffective and reduced the risk executives were willing to take to grow new business. NO MORE MARKET SHARE ABOVE 10%!

Eventually, GE made a smart move and changed the mandate, demanding market definitions where each business had no more than 10% market share. It really triggered leadership to rethink limiting beliefs and boundaries about what their product, added value and market were about. This shift resulted in broader perspectives and the organization to open up to new growth opportunities.

90% MORE ROOM FOR A GROWTH MINDSET The core principle of this new company-wide mandate was that by defining the marketshare below 10%, would give management 90% of the market to shoot for and focus on growth. However, neither the narrow nor the broad definition alone are sufficient; ideally, both should be utilized to monitor core business health ánd identify expansion opportunities.

Ask yourself:

• How do you describe your current market(share)?

• How could you redefine your market in such a way that you have around 10% marketshare?

• What is the biggest difference between the two definitions of your market share?

  
  

Remark: To our experience, it also works the other way around. For smaller companies or startups with a 0.5% market share to define your market at around 10% helps to clarify your focus.