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Last Man Standing

A strategy of outlasting competitors in a commoditizing market to capture remaining market share.

This strategy isn't explicitly mentioned by Simon Wardley in his On 61 different forms of gameplay.

🤔 Explanation​

What is Last Man Standing?​

Last Man Standing is a strategy of attrition, played in a market that is in the final stages of commoditization. As prices and margins collapse, most competitors are unable to sustain operations and are forced to exit the market. The company pursuing a Last Man Standing strategy deliberately prepares for this phase, focusing relentlessly on operational efficiency, economies of scale, and cost control to survive the brutal price war. The ultimate goal is to outlast all rivals and capture the entire remaining market by default.

Why use Last Man Standing?​

This strategy is not about glorious victory, but about survival and inheritance. The primary motivations are:

  • Market Consolidation: To become the sole or dominant player in a mature market.
  • Capture of Market Share: To absorb the customers of all the competitors who have exited.
  • Long-Term Profitability: While margins are thin during the attrition phase, the last player standing can potentially enjoy a stable, albeit low-margin, revenue stream from the consolidated market, or even raise prices once competition is eliminated.
  • Creation of a Utility: The end state of this strategy is often the creation of a stable, utility-like service that, while not exciting, is deeply embedded in the value chains of many other businesses.

🗺️ Real-World Examples​

The Hard Drive Industry​

Over the past few decades, the hard drive industry has seen massive consolidation. Dozens of manufacturers have been acquired or have gone out of business, unable to compete with the relentless downward pressure on prices and the massive scale required to remain profitable. Today, only a handful of players remain, such as Seagate and Western Digital, who are the "last men standing" in a classic commoditized market.

Cloud Computing Price Wars​

Amazon Web Services (AWS), Google Cloud Platform, and Microsoft Azure have been engaged in a long-running price war for cloud computing services. Each company is leveraging its massive scale and operational efficiency to drive down prices, forcing smaller players to exit the market. This is a clear example of a Last Man Standing strategy playing out in real-time, with the major players betting they can outlast the others.

The Airline Industry​

The airline industry, particularly in the United States, has undergone significant consolidation. After years of intense price competition and bankruptcies, a few major carriers have emerged as the dominant players. They survived by ruthlessly cutting costs, optimizing routes, and leveraging economies of scale, effectively playing a Last Man Standing strategy.

🚦 When to Use / When to Avoid​

🚦 Last Man Standing Strategy Self-Assessment Tool

Find out the strategic fit and organisational readiness by marking each statement as Yes/Maybe/No based on your context. Strategy Assessment Guide.

Landscape and Climate

How well does the strategy fit your context?

  • Your map shows a market that is clearly in the commodity stage of evolution.
  • Price is the primary factor in purchasing decisions, and brand loyalty is low.
  • Competitors are showing signs of financial distress or are beginning to exit the market.
  • The total addressable market, while not growing, is stable and large enough to be valuable.

Organisational Readiness (Doctrine)

How capable is your organisation to execute the strategy?

  • We have a significant cost advantage due to superior scale, automation, or operational efficiency.
  • Our organization has the financial resilience to withstand a prolonged period of low or zero margins.
  • Our leadership has the discipline and long-term focus to execute a strategy of attrition.
  • We have a culture that is obsessed with cost control and efficiency.

Assessment and Recommendation

Strategic Fit: Weak. Ability to Execute: Weak.

RECOMMENDATION
Consider alternative strategies or address significant gaps before proceeding.

LowHighStrategic FitHighLowAbility to Execute

Use when​

  • You are in a mature, commoditizing market.
  • You have a clear and sustainable cost advantage over your competitors.
  • You have the financial strength to survive a protracted price war.
  • The long-term value of the consolidated market is worth the short-term pain.

Avoid when​

  • The market is still growing and differentiating.
  • You do not have a significant cost advantage.
  • You lack the financial resources to outlast your competitors.
  • The market is likely to be disrupted by a new technology or business model, making the prize of winning not worth the fight.

🎯 Leadership​

Core challenge​

The core leadership challenge is maintaining organizational morale and discipline during a long and painful war of attrition. It requires a relentless focus on cost-cutting and efficiency, which can be demoralizing for employees. Leaders must be able to communicate a clear vision of the end-game and convince stakeholders to endure the short-term pain for the long-term gain.

Key leadership skills required​

  • Operational Excellence: A deep understanding of how to optimize processes and drive out costs.
  • Financial Discipline: The ability to manage cash flow and maintain financial stability during a period of low profitability.
  • Long-Term Vision: The capacity to stay focused on the ultimate prize, even when the daily reality is bleak.
  • Resilience: The personal and organizational fortitude to withstand a brutal competitive environment.

Ethical considerations​

A Last Man Standing strategy can have a significant negative impact on the industry ecosystem. It can lead to job losses as competitors go out of business and can reduce consumer choice. Leaders must consider the broader consequences of their actions and whether their behavior could be seen as predatory or anti-competitive.

📋 How to Execute​

  1. Confirm the Market Stage: Use Wardley Maps to verify that the market is indeed in a commodity phase and that the conditions are right for a war of attrition.
  2. Achieve Cost Leadership: Relentlessly focus on driving down your costs through automation, process optimization, and economies of scale.
  3. Initiate or Escalate the Price War: Use your cost advantage to lower prices to a level that is unsustainable for your competitors.
  4. Maintain Financial Discipline: Carefully manage your cash flow and resources to ensure you can outlast your rivals.
  5. Acquire Distressed Assets: As competitors begin to fail, consider acquiring their assets (e.g., customers, technology) at a low cost.
  6. Consolidate and Stabilize: Once the competition has been eliminated, stabilize the market, potentially by slowly increasing prices to a sustainable level.

📈 Measuring Success​

  • Competitor Exit: The most obvious measure of success is the number of competitors who have exited the market.
  • Market Share: Are you successfully capturing the market share of the failed competitors?
  • Cost Leadership: Are you maintaining or widening your cost advantage over the remaining players?
  • Post-Consolidation Profitability: Once the war is over, are you able to achieve sustainable profitability?

⚠️ Common Pitfalls and Warning Signs​

Misjudging the Market​

If you initiate a price war in a market that is not yet fully commoditized, you may simply destroy value for everyone, including yourself.

Underestimating Competitors​

Never assume your competitors will fold easily. They may have hidden financial reserves or a stronger will to survive than you anticipate.

Pyrrhic Victory​

You may win the war of attrition, only to find that the consolidated market is smaller or less profitable than you expected, or that it is about to be disrupted by a new technology.

Loss of Focus​

A relentless focus on cost can lead to a decline in quality or customer service, which can damage your brand in the long run.

🧠 Strategic Insights​

The Endgame of Evolution​

Last Man Standing is the natural endgame of the evolutionary process described by Wardley Mapping. It is the final, brutal phase where the market matures into a stable, utility-like service. Understanding this process allows you to anticipate and prepare for it.

Creative Destruction​

This strategy is a powerful example of Joseph Schumpeter's concept of "creative destruction." The old, inefficient players are destroyed, making way for a new, more efficient market structure. While painful, this process is essential for long-term economic progress.

❓ Key Questions to Ask​

  • Market Maturity: Are we certain that this market is in the commodity phase and ripe for consolidation?
  • Cost Advantage: Do we have a genuine and sustainable cost advantage that will allow us to win a price war?
  • Financial Strength: Do we have the financial resources and the stomach to see this through to the end?
  • The Prize: Is the value of the consolidated market large enough to justify the cost of the fight?
  • Disruption Risk: What is the risk that a new technology or business model will disrupt this market before we can reap the rewards of our victory?

🔀 Related Strategies​

  • Threat Acquisition: A potential tactic within a Last Man Standing strategy is to acquire failing competitors cheaply.

  • Pricing Policy: This strategy is fundamentally driven by an aggressive pricing policy.

  • Sweat and Dump: You might use this to offload non-essential assets before embarking on a war of attrition.

  • Exploiting Constraint: If competitors are constrained (e.g., by supply chain issues), you can accelerate their demise.

  • Exploiting Network Effects - leveraging adoption feedback loops to reinforce dominance and outlast competitors in a market war.

  • Confusion of Choice - overwhelming customers with options to obscure competitor offerings and sustain market control.

⛅ Relevant Climatic Patterns​

📚 Further Reading & References​

Author

Dave Hulbert
Dave Hulbert
Builder and maintainer of Wardley Leadership Strategies