Market Share

Market share indicates how well a firm run its business against its competitors. This metric together with delta sales revenue will let managers evaluate both primary and selective demand in their market. It helps identify not only the total market growth or decline but also trends in customers’ selections among competitors.

Sales growth resulting from primary demand (total market growth) is less costly and more profitable than that achieved by capturing share from competitors.

Conversely, losses in market share can signal serious long-term problems that require strategic adjustments. Firms with market shares below a certain level may not be viable.

Similarly, within a firm’s product line, market share trends for individual products are considered early indicators of future opportunities or problems.

Case study
Headline: Gartner Says Worldwide PC Shipments Declined 5.7 Percent in Third Quarter of 2016

“Worldwide PC shipments totaled 68.9 million units in the third quarter of 2016, a 5.7 percent decline from the third quarter of 2015, according to preliminary results by Gartner, Inc. This was the eighth consecutive quarter of PC shipment decline, the longest duration of decline in the history of the PC industry.

Lenovo has recorded six consecutive quarters of year-over-year shipment declines, while the nearest competitors, HP Inc. and Dell, have recorded shipment growth since the second quarter of 2016.”
Christy Pettey – Gartner –

Lenovo leads the market by deploying low-price strategy which makes it gain market share at cost.

HPI gradually gains market share and grow its EBITA a long the way due to the stabilization of the PC business market.

Learnings for AMZ dropshippers

1. Choose the growing primary demand market to enter.
+ Identify primary demand (News/Statistic Bureau)
+ Identify selective demand (#merchants, marketshare ratio,)

2. Explore the product trends
+ Find out #reviews
+ Find out #merchants selling a specific products

3. Market entrance strategy
+ Pricing/Refund/Return Strategy
+ Fulfillment Strategy
+ Branding Strategy (Private Label, ARS)

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