Every category will eventually diverge. Here are some of the keys to take advantage this phenomenon.

Divide & conquer. Every category tends to expand in many different directions, creating opportunities for narrowly focused brands. The typical American coffee shop that served everything has been upstaged by chains that focus on hamburgers (McDonald's), chicken (Kentucky Fried Chicken), pizza (Pizza Hut), donuts (Dunkin' Donuts), submarine sandwiches (Subway), roast beef (Arby's), ice cream (Baskin-Robbins) and many others.

Exploit divergence. As time goes on, every category tends to branch off, creating many opportunities to build new brands. The soft-drink category branched off to produce a cinnamon-flavored drink (Dr Pepper), an all-natural drink (Snapple) a sports drink (Gatorade), an energy drink (Red Bull) and many others.

Survival of the firstest. The first brand into the mind has an enormous advantage. Amazon, California Closets, Nike, PowerBar, Swatch, Starbucks, WD40 and many others. A small lead early in the game can become an insurmountable lead later on.

Survival of the secondest. If you're not first, you can still become a strong No. 2 brand by being the opposite of the leader. The leading mouthwash, Listerine, was a bad-tasting product, so Scope became a strong No. 2 brand by being the good-tasting mouthwash. The leading German luxury car, Mercedes-Benz, made big, comfortable cars, so BMW became a strong No. 2 brand by producing smaller, more nimble vehicles (the ultimate driving machine). Coca-Cola was consumed by older people, so Pepsi-Cola became a strong No. 2 brand by appealing to younger people (the Pepsi Generation). The Home Depot is a messy, male-oriented store, so LoweÕs became a strong No. 2 brand by opening neat, clean, female-oriented stores.

The power of pruning. As a category diverges into two or more different categories, a company needs to decide what of its operations to prune. Trying to cover every single diverging branch with a single brand name is the biggest mistake a company can make.