King of the hill: Dethroning the industry leader

An important goal of many second- or third-ranked firms in an industry is t o dethrone the leader and attain the number one position. Other things bein g equal. industry leadership, because of scale and scope effects and custom er-switching costs, is often associated with greater profitability. Industr y leaders also enjoy other reputation and brand-identification benefits. Th is article examines how challengers can successfully overtake industry lead ers. The focus is on the specific competitive behaviors or new competitive actions that challengers take to dethrone the leader. The study also examin es the competitive actions leaders take to guard against aggressive challen gers. Employing Schumpeter's theory of creative destruction, the article describe s the dynamic competitive actions and reactions of challengers and industry leaders in what the authors refer to as the battle for king of the hill. D rawing from a sample of nearly five thousand competitive actions in 41 indu stries over a seven-year period, we found that successful challengers were more aggressive in taking action, carried out a more complex repertoire of actions, were unpredictable in the timing and location of attack, and were able to delay the reaction of industry leaders. The reasons that industry l eaders fall victim to the actions of challengers are discussed, and strateg ies are offered for industry leaders to more effectively defend their posit ion as king of the hill.