March 16, 2008
Thriving with a middle-market business
John Quelch, the Harvard Business School marketing professor, has an interesting post on his blog about companies that defy conventional wisdom by dominating the mid-market, instead of focusing solely on the high or low ends.
Professor Quelch cites the examples of Tesco, Toyota and Charles Schwab as companies that have adopted this strategy. As he notes, Tesco and Toyota have gone into premium segments after securing the mid-market first.
Many companies now avoid the mid-market:
In business, it’s not fashionable to concentrate on midfield. Focus, we are told, is essential. You either have to be a specialist niche provider of premium-priced products tailored to a particular customer segment, or you have to shoot for scale, using low prices and volume purchasing to attract a mass market and drive down your cost structure.
Yet these companies have thrived by providing goods and services that are perceived as solid value, without having to venture into discounting. The whole post, which is worth reading, can be found here.
