Picture a leading manufacturer of sophisticated medical equipment for kidney dialysis. Now picture a successful chain of stores selling appliances and electronic goods. What might they have in common? Both have a high market share of a defined strategic segment. Both enjoy the benefits of a strong reputation with customers (nephrologists and dialysis centers in one case; homeowners and their families in the other). Both enjoy the benefits of large scale in their respective operations (precision design and manufacturing in one case, national network of large scale stores in the other). In other words, they are in a competitive stronghold: high walls, deep moats, and above average profitability. But what about beyond that point? What if they want to accelerate growth beyond the bounds of market growth in their existing businesses? In particular, what if they want to grow faster without triggering a market share war that collapses prices and drains profitability for everyone?
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