6 Actionable Strategies That Can Increase Your Market Share in 2023 and Beyond!

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Do you know what tactics you need to employ to grow the market share of your business?

You may take many actions to grow your market share and dominate your industry for a while, but if the position is not sustainable, you will lose out in the long term. Make sure you can build on your prior achievements and sustain market share for years or even decades when working to gain market share.

This article will look at the strategies that companies employ to increase their market share.

What is Market Share?

Market share is the portion of a market controlled by a particular company or product. The company’s sales for the period are divided by the total sales for the sector for that period to determine market share.

This metric provides a basic understanding of a company’s size with its market and rivals. The market leader in the business with the most significant market share in a particular sector.

Understanding market share

The fraction of a company’s total revenues that are allocated to the market or sector in which it competes. Choose the period you wish to study before calculating a company’s market share. It might be a fiscal quarter, a whole year, or several years.

The company’s overall sales for that time should then be calculated. Next, estimate the industry’s overall sales, the entire sales of the industry by the company’s total revenues. A company’s market share will be 1 percent if its yearly sales are $1 million and the industry as a whole generates $100 million in revenue.

The formula is “Market Share = Total Company Sales / Total Industry Sales.”

Benefits of Market Share

Investors and analysts closely watch market share growth and declines because they might indicate how competitive a company’s goods or services are. A company’s revenues will increase more quickly than its competitors if it increases its market share. A business that keeps its market share is gaining revenues at the same rate as the whole market for a good or service.

Gaining market share can enable a business to expand its operations and boost profitability. A company may strive to increase its market share by providing new or different items, cutting prices, or employing advertising. In addition, by appealing to more audiences or demographics, it can increase the amount of its market share.

Impact of market share

When there is little growth in established industries, changes in market share have a more significant effect on a company’s performance. On the other hand, businesses in markets that are exciting don’t feel the impact of changes in market share as much.

Companies in these sectors might still see sales growth even though they are losing market share because the overall pie is expanding in these sectors. In this case, the performance of a company’s stock is more significantly impacted by sales growth and margins than by other factors.

Economies of scale

Business owners in any industry benefit from economies of scale because they can save money and gain a competitive advantage over smaller businesses.

There is a misconception among many consumers that it is unfair for a smaller business to charge more for the same product as a larger firm. It is because the cost per unit depends on how many units the company produces.

A large company can produce more because it spreads the cost of production over a greater volume of goods. If several companies within an industry manufacture similar products, the cost of a product may also be dictated by that industry.

Increased sales

Market share has a direct impact on increased sales. When a company increases its market share, it is able to reach more customers and potential customers, leading to increased sales.

Additionally, when a company has a larger market share, it can leverage its scale to capture a larger portion of the market and increase its competitive advantage. This can lead to higher sales and profits.

Expansion of customer base

Market share is a key factor in determining the potential for growth in a customer base. A higher market share indicates that a company has a larger customer base and that more potential customers are being exposed to the company’s products and services.

Companies with higher market shares tend to have more resources to devote to marketing and customer service, which can help to attract new customers.

Additionally, having a larger customer base can create a competitive advantage, as companies can leverage their existing customer base to gain referrals and word-of-mouth marketing.

Reputation

Market share can have a significant impact on a company’s reputation. A company that has a large market share is seen as successful and well-respected, while companies with a small market share are often perceived as struggling or less competitive.

A company with a large market share is also seen as having a competitive advantage over its competitors, which contributes to its good reputation.

Furthermore, a large market share often indicates that the company has a strong brand, which can have a positive impact on its reputation.

Increased bargaining power

A business begins to rule an industry if it gains market share. They can exercise some powers, such as more substantial negotiating power, with more influence over the industry.

When dealing with suppliers and other members of the distribution channel, the business with the greater market share begins to have the upper hand and may use this to its advantage.

6 Ways to Increase Market Share in the Face of Competition

Maintaining your company’s market share is essential, but there are other things. After all, for a business to remain profitable and competitive, its market share must expand along with the industry.

Gaining a larger share than you now have is necessary to increase market share. That would suggest that your growth is above average and that you outperform the market.

To increase market share, a company can focus on the following areas.

Innovation

Innovation is a wonderful way to increase market share. It may take many forms, including introducing new products to the market that competitors have not previously offered or improving production processes. A company may gain the upper hand over rivals and control the market through innovation.

Lowering prices

Increasing market share can also be accomplished by lowering prices. This is because reduced pricing compared to rivals sometimes draws clients, especially those of your competitors.

Companies might think about using promotions, coupons, discounts, and loyalty programs in addition to cutting prices to draw in customers seeking excellent bargains.

Strengthening customer relationships

Companies may keep their present markets and avoid losing their existing customer base due to harsh competition by strengthening their relationships with their current clients. Furthermore, this increases client satisfaction, which promotes customer base expansion through word-of-mouth.

Advertising

Market share may be increased through effective advertising. Innovative branding and marketing initiatives can help to draw in new clients and strengthen ties with current ones by generating interest in the product or service.

Again, having a smart and professional staff on board is essential for successful advertising, which will demand strategy and resources.

Increased Quality

Customers are increasingly more focused on a product’s quality and price. A business may grow its market share by keeping more excellent quality standards.

Acquisition

Purchasing a competitor’s company is a particular strategy to corner the market. By acquiring an opponent, a company can gain access to a new client base, reduce competition, establish authority over the industry, increase market share, and build influence over new markets.

Final words

Market share growth is a common objective for businesses. The use of new technology, the provision of products of more outstanding quality, effective marketing, the acquisition of rival companies, and the development of loyal client bases may achieve this.

As we mentioned in the past, this can be a tricky thing to do given that there is competition in the market, and it’s tough to get ahead of your competition.

We are confident in sharing with you the strategies that companies have used in the past that have allowed them to grow their market share. We hope that these tactics will be helpful to you in your business.

If you would like to learn more about how to increase your market share, we would love to tell you more about our company and how we can help you achieve your goals. You can reach out to us. Thank you for reading!