Identifying the Nature of the Market

Market environments vary according to:
- intensity of competition
- amount of turbulence
- degrees of complexity

The following figure shows how your grid measures these crucial aspects of the market your organization now competes in:

Kingdom markets are characterized by abundant resources that come from adequate margins and/or budgets; simple (or, at least, internally understandable) products and technologies; and stable or predictable conditions.  Normally a single successful company dominates such a market. 

Battleground markets are resource-scarce (i.e., they have very tight margins and budgets) and highly competitive.  Products and services are well understood and usually commoditized.  Each such market typically contains a small number of competitors, most or all of which are well-known.  There is an intense concentration on reducing cost and waste, while increasing quality and efficiency.  Margins are very slim, and organizations survive by dealing in extremely large volumes.  The key issue is usually moving as much product as possible to as many points of distribution as possible, as quickly and inexpensively as possible.

Jungle markets combine the conditions of scarcity with complexity and turbulence.  Products and services are difficult to produce and distribute, yet buyers demand that companies both inexorably reduce costs and produce steadily better and more consistent products or services.  Market conditions change rapidly and are influenced by multiple, uncontrollable outside forces-e.g., governments that know little about production processes.  Jungle markets are often transition states between frontiers and battlegrounds. 

Frontier markets focus on innovation and development.  Either margins are high, providing sufficient resources to support the development of proprietary new products and/or customized services, or investment money is readily available to continue the development process.  Products and services are new and not widely understood.  Many of the market forces are difficult to predict, making life on the frontier risky and opportunistic.

Each of these four market archetypes is subject to a range of variation, which means that it's possible to get considerably more detailed about the market your organization now competes in.

To begin interpreting your score, look on your grid and locate both the quadrant and the mini-quadrant in which you plotted the star.  Then consult the chart below to learn about the particular market your organization faces.

You will find it instructive to review and compare the descriptions in all the different mini-quadrants, particularly 1) other mini-quadrants within your market, and 2) the mini-quadrants adjacent to yours.  As you do this, you may notice that the four mini-quadrants closest to the grid's center offer the greatest opportunities for success.  In general, these mini-quadrants are good places for markets (and organizations) to be.  Indeed, the best of all possible worlds is for your organization and its market to be plotted side by side, close to the center of the grid.