MARKET SHARE

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Market share is a measure that indicates the proportion of a company's sales in relation to total sales in a specific market. That is to say, is the market share that the company holds in terms of sales compared to its competitors. Market share can be calculated using different methodologies, such as market share by value or market share by volume. Market share by value refers to the total value of a company's sales compared to the total value of sales in the market, while market share by volume refers to the total quantity of products sold by a company compared to the total quantity of products sold in the market.

Market share is an important measure for companies, as it can indicate their position in the market and their ability to compete with other players in the market. A higher market share indicates that a company has a larger market share and may have more bargaining power with suppliers, distributors and other market players. On the other hand, a lower market share may indicate that a company finds it more difficult to compete and needs to review its marketing and sales strategy. It is important to note that market share may vary over time, depending on factors such as competition, market developments and companies' marketing and sales strategies. It is therefore important to regularly monitor market share and make adjustments to the company's strategy accordingly.

Realistic market share in a new company

Establishing realistic market shares for a new company can be challenging, as the company is entering an established market and may not have an existing customer base.

Here are some factors to consider when setting realistic market shares for a new venture:

1. Market size: it is important to have a clear understanding of the size of the market and how it is expanding in order to establish a realistic market share. Market research and industry analysis should be conducted to understand the size and dynamics of the market.
2. Competence: it is important to assess the competitors in the market and determine the company's position compared to them. The level of competition in the market may affect the company's ability to capture market share.
3. Marketing strategy: An effective marketing strategy can help a new company establish itself in the market and gain market share. The company must develop a sound and effective marketing strategy that reaches the right customers and establishes the brand in the market.
4. Product differentiation: Product differentiation can help a new company stand out in an established market. The company must develop unique and attractive products that appeal to customers and give them a competitive advantage.
5. Speed of market adoption: Speed to market refers to the speed with which customers adopt a new product or service. It is important to understand the speed of market adoption and how it affects a company's ability to capture market share.

Taking these factors into account, the company should set a realistic and achievable market share. It is important to bear in mind that market share may vary over time and the company may need to adjust its targets as it enters the market and gains experience.

Examples of market share developments in well-known start-ups

Here are some examples of the market share developments of some well-known start-ups:

1. Netflix: When it started offering online streaming services in 2007, its market share in the DVD rental market was 1%. Over time, the company focused on streaming services and achieved a market share of 32% in 2019 in the video streaming market. This was largely due to its investment in original content, such as series like Stranger Things and The Crown, and its ability to offer a wide selection of content.
2. Tesla: entered the electric car market in 2008 with the launch of the Roadster, and has since achieved a steadily growing market share. In 2019, Tesla had a 17% market share in the global electric vehicle market, thanks in large part to the success of its Model S and Model X, and the launch of its lower-priced Model 3.
3. Airbnb: When it started in 2008, the short-term rental market was dominated by large hotel chains and small holiday rental owners. However, the company achieved a 20% market share in the global short-term rental market in 2019, outperforming large hotel chains such as Marriott. Airbnb has achieved this by creating an easy-to-use platform, competitive pricing and a wide selection of accommodations around the world.
4. Dropbox: When it entered the cloud storage market in 2008, there was strong competition in the cloud market, including large companies such as Google and Amazon. Despite this, Dropbox has achieved a 16% market share in the global cloud storage market in 2019, thanks to its focus on simplicity, ease of use and data security.

In general, these start-ups were able to increase their market share by focusing on innovation, providing exceptional customer service and building a strong brand. As these companies continued to grow and evolve, they were able to gain more market share and establish themselves as leaders in their respective markets.

What is the normal market share development in a new company?

The evolution of market share in a new company can vary depending on a number of factors, such as industry, competition, market size and marketing and sales strategy.

In general, the evolution of market share in a new company is usually as follows:

1. Introduction stage: in the introduction stage, the company is introducing itself to the market and trying to establish its presence. At this stage, market share is usually low, as the company is competing with other established players in the market. The company must focus on establishing its brand and growing its customer base.
2. Growth stage: in the growth stage, the company has established its presence in the market and is beginning to gain market share. At this stage, the company should focus on increasing its market share and expanding its customer base. The company should also develop new products or services and expand its geographic presence.
3. Maturity stage: in the maturity stage, the company has gained a significant market share and is competing with other established players in the market. At this stage, market share growth may be slower, and the company must focus on maintaining its market position and improving the quality of its products or services.
4. Stage of decline: in the decline stage, the company may start to lose market share due to competition, market developments or lack of innovation. In this stage, the company should focus on adapting to changes in the market and finding new opportunities to grow.

It is important to note that the evolution of market share may vary from company to company and industry to industry. Some companies may experience faster growth in the early stages, while others may take longer to establish themselves in the market. The key to successful market share development is to have a sound strategy and be prepared to adapt to changes in the market.

Case study on market share assumptions for the first 18 months of a new venture

Here is a case study on market share assumptions for the first 18 months of a new company:

Suppose a new health food company is entering the health food market, a highly competitive and evolving market. The company has conducted extensive market research and has identified an opportunity in the online health food market, where consumers can purchase healthy, personalised food directly from the company's website. The company aims to gain a 10% market share in the online health food market in the first 18 months.

IN ORDER TO ACHIEVE THIS OBJECTIVE, THE COMPANY HAS ESTABLISHED THE FOLLOWING ASSUMPTIONS:

• The market demand for healthy food online continues to grow.
• The company can offer high quality products at competitive prices.
• The company can attract customers through an effective online marketing strategy.
• The company can maintain a high level of customer satisfaction and obtain positive word-of-mouth recommendations.

To validate these assumptions, the company will conduct a series of tests during the first 18 months. For example, the company will conduct market research to better understand market trends and consumer needs. It will also carry out product testing to ensure that the products it offers are of high quality and meet customers' needs. The company will also implement an online marketing strategy, including online advertising, content marketing and influencer marketing. The company will track marketing metrics, such as the number of website visitors, conversion rate and cost per customer acquisition, to assess the effectiveness of the marketing strategy.

In addition, the company will conduct surveys and analysis of customer feedback to assess customer satisfaction and determine whether positive word-of-mouth recommendations are being obtained. With these tests, the company will be able to validate its assumptions and adjust its strategy accordingly to reach its target of 10% market share in the online health food market within the first 18 months.