Why Companies Don't Compete in the Middle Market.

The article examines why companies struggle to compete in the middle market, using the Indian e-commerce firm Dunzo as a case study. Dunzo’s attempt to serve all urban customers with modest premiums failed due to an unsustainable operating model that was neither cost-efficient like commodity providers nor premium-focused like specialty services, leading to its shutdown by 2025. The article argues that in the digital age, industries reward businesses that operate at either end of the commodity-specialty spectrum, as marginal differentiation in the middle is easily replicated and unprofitable. It introduces the 4S framework—Select, Satisfy, Serve, and Survive—which guides companies to choose target customers they can delight consistently with a scalable operating model and sustainable economics. The example of Indonesia’s Bobobox illustrates success by avoiding the middle through precise efficiency at the commodity end and personalized experiences at the specialty end. [Extracted from the article]