Of the many contributions Jack Welch has made to business wisdom, one of his most famous was “Be #1 or #2 in every market.” That advice served GE well in shaping its portfolio of businesses and its strategy for many years, but it’s not clear to us that it is as relevant any more. It may, in fact, be a dangerous strategy in today’s business environment.
Why Dominating Your Category Can Be a Flawed Strategy
A cautionary tale from the cereal business.
February 07, 2018
Summary.
GE’s Jack Welch rebuilt the conglomerate in the 1980s using an easy-to-communicate strategy: Let’s be #1 or #2 in every market we compete, or get out of it. But as categories have blurred, that strategy is growing less useful. Dominating a shrinking market won’t power growth, and many definitions of markets are becoming outdated. It may comfort General Mills to be #1 in the cold cereal market, but in a world where more consumers are choosing smoothies, bagels, and fast food for breakfast, its sales are declining.
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Accelerate your career with Harvard ManageMentor®. HBR Learning’s online leadership training helps you hone your skills with courses like Strategy Planning and Execution. Earn badges to share on LinkedIn and your resume. Access more than 40 courses trusted by Fortune 500 companies.
How to develop a winning strategy—and put it to work.