The golfing world is bracing for the return of Tiger Woods at the Masters this week (in case you missed it, he had an unfortunate incident involving his wife and a golf club). Amongst the many looking on with interest will be Jennifer Brown, an economist with Northwestern University.

Ms. Brown has tracked and plotted every Tiger Woods appearance, and the affect he has had on the game.  As it turns out, in the tournaments he played in between 1999 and 2006, the field scored an entire .8 of a stroke higher than in the tournaments he didn’t play (he does play in the hardest tournaments, but nearly a stroke difference in such a precise game is just staggering). Ms. Brown’s conclusion is that the presence of such a dominant player forces the field to press harder or just quit.

Jonah Lehrer, the author of “How we Decide” took the phenomena a step further and wrote an article wondering if “the superstar effect” applies in other competitive environments. This mindset has daunting implications for strategists. It suggests that dominance in an industry may be something of a self-fulfilling prophecy; that a dominant competitor may dissuade others from entering a market space, only fortifying its position.

This way of thinking only reinforces an accepted strategic principle; an organization is always better off owning a significant share in a smaller market than trying to penetrate many markets at the same time.  Every attempt to enter a new market requires the marketer to expend resources in a space where they have high R&D costs (unfamiliarity with the market), less brand awareness and less of a chance to achieve market leadership. 

Poor targeting is chronic in American businesses. It is typical for marketers to attempt to penetrate the largest market possible; usually at their peril. Generally speaking they are well advised to seek out smaller, undefined markets (white spaces) instead of competing within crowded larger ones.

I was recently working on a project for one of the nation’s largest professional services firms. In my research on the Internet I came across a firm that specialized in marketing and public relations for CPA’s. While I have no imperial data to prove it, my educated guess is that such a market is lucrative (as CPA’s are notoriously poor marketers). What grabbed my attention was how narrow and well defined the target was. Any CPA viewing the website would think “these people understand my business, because that is all they do.” Experts in everything are experts in nothing. In a competitive bid for an accounting firm’s business, such a company would have a significant competitive advantage over a generalist. They would be positioned as the superstar.

Now that Tiger has lost some of his luster, it will be interesting to see how quickly he can return to intimidating the field.  Of course at this point, it is Tiger who is probably more intimidated by; Elin.