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HOW DİD THEY MAİNTAİN THEİR RECORD LEADERSHİPS

How did they maintain their record leaderships

İş Bankası, Ülker, Arçelik, İpana, Pınar, Vitra and others… Most of them have been the market leaders in Turkey ever since they were founded and have never given way to their rivals. It is not luck...

Son Güncelleme: 01.03.2007

İş Bankası, Ülker, Arçelik, İpana, Pınar, Vitra and others… Most of them have been the market leaders in Turkey ever since they were founded and have never given way to their rivals. It is not luck which has enabled these brands to retain the leadership for so many years. They have all consistently ensured that they offer quality which is not only not inferior but superior to their rivals. We conducted a study to identify 40 brands which have remained the leaders in their markets for more than five years, and 28 of these have been the leading companies and brands ever since they first entered the market…

It was in 1989 that marketing professor Peter Doyle pointed to profitability and said: “Companies which have 40 percent of the market receive three times more investment income than those which have 10 percent of the market. In supermarket brands in Britain, the leading brand generates six times the income of the second brand and the third and fourth brands don’t make any profits.”

Despite the passage of years, the allure of being the market leader has not changed; and attaining this goal has always remained a priority for companies when they set their strategic targets. Because market leadership secures the lion’s share of profits for the brand or the company. For this reason, brands and companies which retain market leadership for a long time have succeeded in going from strength to strength. According to Interbrand, the following have been the market leaders in the US ever since 1933: Del Monte in canned fruits, Wrigley in chewing gum, Nabisco in biscuits, Gillette in razor blades and Hoover in vacuum cleaners...

There are companies in a similar position in Turkey. İş Bankası has been the leader in private banking for 83 years, Ülker for 55 years in biscuits and Arçelik for 52 years in white goods. It is not luck which has enabled these brands to retain the leadership for so many years. They have all consistently ensured that they offer quality which is not only not inferior but superior to their rivals. They have supported the brand with extensive investments in production and marketing. Through research and development they have implemented changes in packaging and positioning and product formulae in accordance with changes in consumer preferences. retaining their market leadership has become their most important strategic goal. And they have never taken their eyes off the ball.

The regular market leaders in Turkey take an average of 30 percent from the market. Most are the creators of their category. They have come to the fore with their expertise and innovation in positioning. Capital conducted a comprehensive survey and identified the most consistent market leaders in Turkish history. The survey also showed that those who had been the leaders in their categories since they entered it or since they were founded were also the most consistent market leaders.

How Do They Maintain Their Leadership?
Market leaders may not always be the most popular or the most respected companies. But it is a fact that they influence the strategies of their rivals in several different ways and control the market most of the time. With some exceptions, market leaders are generally the most profitable companies in the sector. For this reason they have greater resources than the other players. When they use these resources correctly, this creates a snowball effect, they go from strength to strength and secure competitive advantage in different areas.
For example, American retail giant and market leader Wal-Mart can sell products at very low prices. Its most important competitive advantage is its ability to conduct everything on a large scale. It can secure a price advantage because it buys in large quantities and reduce costs in terms of logistics by storing all its products in hangers. Even it is easy for giants such as Wal-Mart, which can use economies of scale, to preserve their market leadership, it is not so easy for every company.

Assistant Professor Lerzan Aksoy of Koç University agrees with this view and says: “Sometimes a market leader can unexpectedly lose its leading position.” He cites as an example the manner in which Nokia and Ericsson, which realized innovations in digital telephones, overtook Motorola, the leader in the analogue telephone market. Aksoy says that sometimes they can lose their market leadership because of over-confidence or because they have not taken the competition seriously and he cites as an example how the market leader Sears did not take Wal-Mart seriously when it first entered the market. He says that another of those who lost market share because they did not take their rivals seriously is Levis, which lost market share to GAP and Tommy Hilfiger. The secret of the success of companies which have retained market leadership for years is to be aware of all of these risks and never become complacent.

Özlem Aydın
oaydin@capital.com.tr

  

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