Some Real World Examples

One way to better understand these four market environments is to look at some companies that routinely do business in them. (In the examples that follow, I'm pointing not to companies' organizational structures, but to their presence in the marketplace , as created by their products and services.)

Kingdom
IBM ruled the computer hardware and software businesses for at least 15 years. Because its products were in high demand, the company was able to determine prices, allot production quotas to customers, and provide whatever level of service it felt it could support. They have adapted their product lines in significant ways to maintain their dominant status. They have moved from hardware production to software systems and service - continuing their premium position.

3M dominated the sandpaper and masking tape markets for many years - until at least 1985 - and charged premier prices for these items. It also produced the first commercial copying machines, setting the margins and practices in that market for years, until plain paper copying took over and Xerox became the dominant player. This process later repeated itself with both audio and video tape. As these products moved through their life-cycle, 3M disposed of them in one way or another.

Two or three decades ago, the number of American companies operating in kingdom environments was large. Today, however, few kingdoms remain. Boeing dominates the military airline construction market. Microsoft is attempting to maintain its empire by steadily improving its existing products, rather than introducing lots of new ones. For many years Microsoft has eliminated much of its competition and determined the market channels to its customers.

Battleground
The players in this area are legend. Coca-Cola and Pepsi have been battling each other in the soft-drink business for decades. A few beer companies - Anheuser-Busch, Miller, Stroh's, and Heileman - fought with international competitors over the market for some time, duking it out over price, shelf space, and insignificant product differentiation and have consolidated into a few companies. Nike, Reebok, and Adidas competed using fashion as a differentiator.

Banking is a classic battleground market, with constant consolidation into fewer and fewer players, each offering very similar services, and the whole industry lowering prices through computerization and efficiency measures. Most other financial services industries, such as life insurance and stock brokerages, also compete in battleground markets. So do long distance phone companies and commercial airlines.

In some battlegrounds, the key players have turned to franchises to control distribution-and, thus, to dominate. McDonald's, Subway, and many other franchises that populate the strip malls of America fit this pattern.

Jungle
In a jungle environment, companies are under the constant and simultaneous pressures of quality, customer satisfaction, and pricing. The office supplies industry has been a jungle for decades (and still is, for the most part, even though Office Depot, Staples and Office Max have turned the retail segment of that market into a mini-battleground). Travel agencies have operated in a jungle environment for close to a century. So have movie theaters, specialty grocers and pizza parlors.

Frontier
Companies competing in this environment invest significant amounts of money into the development of new products and services.

Most social networks - Twitter, Facebook, LinkedIn, etc. - continue to develop their markets and business formula and are therefore good examples of frontier companies. The biotech industry has created its own frontier market environment as well.