What is market leader?

A market leader is the company with the largest share of a market — and, usually, the one that sets the reference point everyone else positions against. Kotler’s classic taxonomy pairs the leader with three other roles: challengers who attack the leader head-on, followers who imitate profitably, and nichers who dominate segments too small for the leader to care about.

Knowing which role each competitor plays predicts their behavior: leaders defend and bundle, challengers cut price and pick fights, nichers go deep on focus. For most smaller companies the winning move is not challenging the leader everywhere, but picking the segment where the leader’s averages make them weak.