The Path of the Master

Shaping the market

A Master company tries to change the market, to make the market take what it has to offer. It seeks a challenge to grow at the maximum rate.

The uphill path symbolizes its strategy. A difficult climb is a barrier to entry to those who have less will.

The masterful organization creates its customers by an active approach. It is very disciplined and efficient. It sells something in which it has an investment or a competitive advantage, not necessarily what the market is asking for. It seeks to establish its product as the standard, dominate the distribution channels and constrain the market's ability to choose. The product is not sold by quality or price, but by availability and reputation. Therefor, standardization and consistency are very important. The approach is designed to maximize market share. An organization can take this path only if it has power sufficient for the struggle.

Some examples: IBM never had the best computer technology, and Microsoft never had the best operating system software. But IBM became the safe choice in a very expensive and highly technical purchasing decision, and Microsoft became the standard at a time when compatibility was sorely needed. Proctor and Gamble is creating a market for its laundry products in China by a strong sales effort. Their products are no better than local Chinese products, but their products are more consistently available.

The Path of the Saint

Serving the market

A Saintly company responds to the customers' needs. Its greatest pleasure is in a happy customer, and it continually changes its product to suit the market's changing desires.

The downhill path symbolizes its strategy: The way is easy if you follow your customers.

Customers seek out this kind of organization because they need what it has, and the company is very responsive to its customer's needs. Whereas a masterful company tries to control the customers' interaction with the company and channel interaction into prescribed and efficient transactions, a saintly organization tries to open up customer communication to better understand the customers and their needs.

This kind of organization tries to give its customers what they say they want. This would appear to be the easiest way to success, but it is a self-effacing approach that not every organization can take. This company is a servant to the customer, and may receive little recognition. The saintly organization can be quite profitable. They are not marketing driven, they are customer driven. But the customers don't always know what is truly best, even for themselves.

Some examples: Burger King constantly experiments with new menus, to gauge the taste of its customers. It doesn't push health-food. It follows the public's tastes; it doesn't preach to them. People like beer too, so Coors concentrates on making a good one. Saturn removed the hassle from the car-buying experience because buyers didn't like it. Southwest treats customers as they like to be treated.

The Path of the Prophet

Educating the market

A Prophet company seeks to raise the world to a higher level, by giving a new vision. It educates the market to appreciate a higher level product, something that people didn't even know they needed, but which clearly benefits society. The telephone is an example, and AT&T was such a company originally.

The image of a breakthrough to a new world is its symbol.

The prophetic organization creates customers from potential buyers by showing them something better than anything they knew before, even if they don't initially appreciate it.

This kind of organization has a "better" idea, and consequently it must educate the public to appreciate something it is not familiar with. This organization is not giving the public what it says it wants, because the public is not knowledgable about the opportunity, doesn't value the superior features, or doesn't even know how to use the product. There is no established market of customers to serve or to herd in your direction. Price wars and distribution domination will not help; education is necessary. Resources will be required for creating a market where none exists. When the market is created, it may be stolen by others.

Some examples: Gordon Bell, a founder of Digital, one of the world's most profitable computer companies, doubted that people would want their own personal computer. Apple pioneered the personal computer, then lost the market to IBM and others. Then Apple pioneered the Graphical User Interface, which Microsoft copied. Apple has the world's best Operating System (MAC OS X), but the public values compatibility more and doesn't appreciate what it's missing in Microsoft products.

Tom's created a natural toothpaste, but most people aren't aware of the chemical content of all other commercial toothpastes. Tom's isn't giving people what they ask for, and it can't make its toothpaste as cheaply as P&G, so it doesn't get the margin it needs to dominate the industry. But it won't change its ingredients, neither to grow faster nor to widen its appeal. It has a mission. It's prophetic. If it's successful in educating the market, it will be enormously successful as it stands alone in the path the market eventually takes.