Looking to grow your startup business? Here are some great tips to do so and create a great business.
What Exactly Is Market Share?
Every company tries to increase its market share. After all, every business wants to boost its bottom line. The more market share you acquire, the more sales you make. A company typically increases its market share through innovating and adding more value venture capital funding can help with investments in innovation. Also, by boosting customer relationships and even through acquiring competition. A company’s market share is the total percentage it controls of the marketplace for the various products and services it offers.
Knowing What Market Share Is All About
The total market share of a company can be calculated by looking at the percentage of sales or units a company makes in any given market. By using the percentage method for calculating market share, if a company sells $1 million yearly and the total sales in the market are $100 million, the company would have 1 percent of the total market share. When using the percentage of units methodology, if a company sells a total of 50,000 units and the industry sells as much as 5 million units in total, they would have a 1 percent market share.
The more market share a company can obtain, the more of a competitive advantage it can get. A company that has a larger percentage market share is typically going to have economies of scale. This yields benefits in being able to get better prices from its distributors or suppliers. It also allows them to place larger orders which gives them greater buying power. Likewise, it can decrease the cost of each unit and the cost to acquire each customer.
Boosting Market Share
If a business is looking to increase market share one of the most common ways to do so is through innovation. Innovation is easily one of the top ways to increase market share. Whenever a company brings brand new technology or a new product to an industry, they have a value add that their competition doesn’t. This means they will be able to capitalize on new interests and sell to new customers. They can also steal customers from their competition because they have a value proposition their competition doesn’t. A lot of the customers you get from innovating will end up lifelong customers because they will develop brand loyalty.
By enhancing your customer relationships, a company can protect its market share. They can prevent customers from going to the competition by developing the relationships they have even if their competition has hot offers or exciting new products. A company can grow its market share by using the same tactics because they will have customers that love their products. This can turn these customers into brand advocates. They will be generating even more sales on their own by telling their friends and family about their positive experiences with your brand. Word of mouth can be a very strong way to capture more market share without having to spend on advertising or marketing. This is especially true in today’s digital age where people share more products and services they love freely on social media.
Maintaining Market Share
According to Certum IT support not only is growing your market share important but maintaining your market share is equally so. Any company that has the highest market share in an industry typically has dedicated and skilled employees. Retaining the highest level of talent in your industry is one of the best ways to ensure you maintain the market share you’ve accumulated over the years. If you have to continue to hire and train new employees, you will find it very difficult to maintain the core competencies that made you a market leader, to begin with. Employees should be treated with respect and you need to prioritize fostering a good work culture to maintain good relationships with them.
One of the easiest and most sure ways to acquire more market share is by acquiring a company that has some already via financial means available to you. By acquiring a company that has developed relationships with customers, you can immediately tap into their customer base. This can keep you from having to develop relationships with these customers on your own or having to steal them from your competition. An acquisition deal can be beneficial for companies looking to grow within a competitive market very quickly.