If you are the market leader, there is a major responsibility on your shoulders.
That of being aggressive in introducing new products, particularly pushing the envelope in terms of offering higher-end products.
The market leader has the luxury, in the form of an established market and a strong distribution network, to take risks towards launching more creative products and also those which test the limits of much the customer is willing to pay.
It is indeed a sad day when due to the somnolence of the company, it finds itself flanked from the top. I.e. a competitor preempts the company by launching a product in a higher price segment as compared to the prevailing best sellers of the established company.
Bajaj Auto did it to Hero Honda (when Hero and Honda were as part of a single company). Bajaj Auto was struggling to make inroads in the bike segment but was finding it tough to dent the strong positioning of Splendour and Passion which were popular offerings with the Honda label.
Bajaj Auto, after some unsuccessful efforts to position itself from a scooter company to a bike company worthy of challenging Honda, hit upon a novel plan. Instead of fighting with Honda on the competitor’s turf, it decided to flank it from the top. It launched the Pulsar, the quintessential macho bike. The customers lapped it up. Bajaj was no longer fighting with Honda. It had positioned itself above it.
In one fell swoop, in was not only worthy of the Japanese competitor, it was one up on it.
Hero Honda let this fate befall upon itself. It had only itself to blame.
Similarly, when a senior executive from Hero Cycles quit the company to start selling expensive imported bicycles in India. Hero Cycles itself should have started producing cycles costing more than Rs 10,000 each using imported components like Shimano gears. It was again complacent and left the field vacant for a new-comer.
Let this be a lesson to all market leaders and also those placed in a strong enough position to take risks of breaking the glass ceiling regarding premium products.