If you’re not number 1 or 2 in your market, then, well, so what?

I can’t tell you how many times I’ve heard the following fact: Most magazine categories only have room for two titles. However, I know of small publishers who have the #3 title in a market but who still are quite profitable. New Yorker writer James Surowiecki explores this topic in an article (quick, before it goes behind the cost wall) that uses Ninetendo as an example of how a #3 market-player can be extremely profitable.

The key to succeess in a crowded marketplace is the common sense but counter-intutitive-to-MBA-types principle reflected in the following quote from the article:

“The more a company focusses on beating its competitors, rather than on the bottom line, the worse it is likely to do. And a study of the performance of twenty major American companies over four decades found that the ones putting more emphasis on market share than on profit ended up with lower returns on investment; of the six companies that defined their goal exclusively as market share, four eventually went out of business.”