Summary of "Niche"

Business Concepts from the Video on “Niche“

Niche Definition & Frameworks

The term “niche“ originates from a French word meaning “nest” and can be understood as a specific role or position within an environment. In business, the ecological niche concept parallels market positioning: a company’s niche is its unique role or job in the market ecosystem.

George Hutchinson’s n-dimensional hypervolume framework defines a niche by multiple biotic and abiotic factors such as sunlight, moisture, temperature, food, and predators. Each factor represents a dimension, and together they form a complex space that only one species (or business) can occupy without direct overlap.

Fundamental Niche vs. Realized Niche

Fundamental niche: The full potential market or environment where a business could operate.
Realized niche: The actual market share after competition and constraints are considered.

Competitive Exclusion Principle

No two species (or companies) can occupy the exact same niche simultaneously if they are in direct competition. Therefore, businesses must differentiate their niche to avoid direct competition or risk being outcompeted.

Case Study: Ecological Analogy Applied to Business Strategy

The Yellowstone ecosystem provides a clear example of niche dynamics:

Grey wolves were removed, allowing coyotes to expand into the wolf’s niche.
Coyotes’ expansion negatively impacted red fox populations due to competition.
The reintroduction of wolves caused a drastic reduction in coyote numbers (about 50% decline) because wolves directly compete and dominate the same niche.
Red fox populations rebounded as coyote numbers declined.
Coyotes adapted by changing behavior and location, such as moving near roads for human protection, illustrating strategic adaptation to competitive pressures.

Business implication: When a dominant competitor returns or enters a market, smaller players may be forced to adapt, pivot, or face decline.

Actionable Recommendations for Business

Identify your fundamental niche (potential market space).
Understand your realized niche by analyzing competitors and market constraints.
Avoid direct competition with dominant players; find unique value propositions or adapt to new niches.
Monitor competitor moves closely (similar to the wolf’s reintroduction) and be ready to pivot strategically.
Recognize that niches are dynamic and require ongoing adaptation.