You are in a mature market and everyone’s margins have eroded but yours are worse. Your margins have eroded even more than your competitors. So what do you do? Your back is up against the rope! Do you fight your way out of the corner? The answer is no. Rather, find a new corner to fight your way into with a mature market strategy.

In a mature market, the margins start to thin out. Why? This is because your product or service is pretty much the same as everybody else’s. Subsequently, price is the easiest thing to compete on. If you are not willing to drop your price, somebody else will. When they do, you will also need to, and so it continues.

Typically, as a market matures, everybody’s margins erode. However somebody in this market will probably have a cost advantage. Sheer scale for most businesses is the cause of the cost advantage. This is not about how you price your product. Rather, it is about the cost of your product. For example, to produce your product or service, it may cost you $1.00. However, somebody in the market may be producing their product or service for $.90, or $.80, or $.95, and hopefully selling at a $1.50. Their costs are actually lower than yours, and normally the reason for this is scale.

Once the market has matured, the answer is not to copy your competitors. Your competitors will have you at a permanent disadvantage. However, this is only if you let them.


What do we need to do?

For the overall market, your competitors will have a cost advantage. However, differentiation is when you can charge more for your product than the others in the market because there is something about your product or service that your market values. In this case, you have a differentiation advantage. In contrast, cost advantage is where they can produce their product or service for less. How you and your competitors price your product or service is a separate decision.

For your mature market strategy, you need to either have some sort of value that you add to the market, which will allow you to charge more, or some cost advantage that will allow you to make it for less. If you are not doing either of these, you will be losing money.

If there is a player in the market who is bigger than you and has a scale advantage, what do you do? The answer is not in copying your competitor.  In this case, the mature market strategy is to find a niche – a part of the market for which you can command a premium to what you are charging today. There is something that you do somewhere, which makes you more valuable to a certain part of the market than your competitors.

Ask yourself:

  • Do you understand them better?
  • Do you serve them better?
  • Do you put together something core about your product or service that is different?
  • Do you handle complexity better?
  • Do you handle short notice better?

We need to do the following things:

  1. Find that something that you do, which a part of the market values. This is your strength.
  2. Find the market for which this is most true.
  3. Once you have done the above, double down on your strength. Do whatever you can to your product or service to make that strength even greater.



If you are in a mature market, the overall margins are going to be down. You will not be able to change this. However, what you can change is how much margin you make. This is not achieved by flapping around in the whole market. Rather, find a micro-niche and come down to a part of the market for which you can command a fair market price. Subsequently, you should only serve this part of the market. Oddly enough, for this mature market strategy, shrinking your market can often grow your revenue, and it will certainly grow your profits.

Find a niche market for which you can command a premium for your mature market strategy

Find a niche market for which you can command a premium.

In your funnel plan, we identify what problem you solve for your market. We then identify the market for which this problem most resonates, which is the market you should be targeting. Everybody else should become a non-target. Any time spent on serving them is time that you are not spending on the market that you are best at serving.

If you do not have a funnel plan right now, get yourself a free one here, and start to build out a plan that identifies:

  1. The problem that you solve better than anyone else.
  2. The market who most has this problem.
  3. The solution that you are going to take to this market that can best solve this problem.
  4. The right tactics to use to serve this market.



Our thanks

  • Geoffrey Moore for Crossing the Chasm
  • Hugh Macfarlane from for
  • Funnel Plan
  • Claudia Ivanka for production
  • Hannah Sivalingam for supervising
  • Hugh Macfarlane for scripting and presenting this week’s show