Each of today's organizations operates in one or more of these four distinctly different market environments: the kingdom, the battleground, the jungle, and the frontier.

Kingdom
Kingdom markets have the least competition and market difficulty. Companies that have operated successfully in a kingdom for some time dominate and rule their part of the market. They have the luxury of producing what they believe is valuable--first to themselves, then to their customers.

Typically, these companies can win out over new competitors because their high margins provide them with enough resources to dominate the market. Anyone attempting to gain entry is quickly brushed aside through huge advertising campaigns, litigation on patents, large temporary price drops on competing products, and other expensive but highly effective tactics.

In a kingdom market, customers have a clear need for the industry's products and services; indeed, demand often outstrips supply. Customers (as well as just about everyone in the supply chain) are more concerned with back-orders than with quality.

Products and technologies tend to be simple and understandable, and conditions tend to stay stable and predictable. Patents usually prevent incursions by other companies.

Thirty years ago, a significant percentage of American industries functioned in kingdom markets. Today, the great majority do not.

Battleground
A battleground environment is very competitive, but not very complex or changeable. Products and services marketed in this environment are familiar and well understood -- e.g., cola, running shoes, photocopiers, and air travel. A few large players tend to dominate and compete vigorously, making their profit through volume.

Companies in this environment concentrate their energy on efficiency, on reducing cost and waste, and on finding small but ingenious ways to differentiate what they sell. Customers expect steadily-increasing quality, and the focus is on delivering products and services to as many customers as possible, as quickly and cheaply as possible. Companies that serve this market are always concerned with their number of points of distribution (PODs). Increase these and you increase sales; control these sufficiently and you control price and distribution. In a battleground environment, companies thus fight two battles: a battle of numbers and a battle for the minds of consumers.

Most new products -- as they become widely known, accepted, and used -- eventually drift into this environment. As a product becomes simpler to make and easier to get to market, the players in the industry begin to consolidate in the struggle to profitably produce it.

Jungle
Jungle markets combine two of the most difficult marketing situations. On the one hand, margins are under considerable pressure. On the other, there is a great deal of difficulty in positioning, monitoring, and controlling products or services.

Years ago, this situation was avoided like the plague. The assumption was that such an environment usually meant the death of the product, service, or organization -- unless the company was very well-funded. Today, however, the jungle is often the norm.

Most players in this market have products that recently came out of the frontier and are now being sorted out by the market. What was previously protected by patents may now be in competition with a new "me-too" product which skirts the patent through the clever use of technology. Ultimately, winners will emerge and losers will disappear.

Products and services in a jungle market are expected to have both high quality and low cost, yet they remain complex and difficult to produce and distribute. Meanwhile, conditions keep changing rapidly and are influenced by multiple outside forces.

Frontier
Most of the products and services in this market environment are new ones. A significant portion of these create their own new market niches, and in some cases entire new industries. Margins tend to be significant, but markets are often difficult to enter and serve. The two primary difficulties are 1) introducing new products or services into existing distribution channels (or, sometimes, creating new ones), and 2) managing the costs and technical complexity of new product development.

In order to survive the entry process, companies need to develop significant resources, normally through high margins. Because the products or services are new, information about them is not readily available. This essentially forces a company to invest heavily in advertising.

Doing business in a frontier environment is often unpredictable, risky, and opportunistic. Nevertheless, some firms -- the pharmaceutical company Merck, for example -- have developed very successful new product launch processes which get them into markets ahead of competitors and allow them to acquire more than adequate margins quite quickly

Here is a bird's-eye view of all four of these interactive market environments:

In kingdom markets, one or two companies dominate; in jungles, multiple companies contest vigorously for every percentage point of market share. In frontiers, companies open new markets; in battlegrounds, they close them.