Optimal Market Position

Market dominance is a powerful barrier to any innovation. All marketing decisions are determined by the desire to maintain market position. One common approach is formulated as follows: "We want to be leaders." Another sounds like this: "We are not interested in market share as long as sales volume is growing." Both statements seem convincing, but both are wrong. It is not so good for a company if sales volume is growing but it is losing market position, i.e., the market is expanding faster than the company's sales volume. A company with a small market share will eventually be pushed to the sidelines. But having the maximum market share does not make sense either, even in the absence of antitrust legislation. Market dominance "lulls" the leader and serves as a powerful brake on any innovation, hindering adaptation to change. The market resists dependence on one dominant supplier. No one wants to be at the mercy of a monopolist. The goal should be to achieve and maintain not the maximum, but the optimal market position. This requires careful analysis of consumers, products and services, market segments, and distribution channels. It demands a market strategy and decision-making associated with significant risk. TIP OF THE DAY. Determine the optimal market share for your company by carefully analyzing consumers, competitors, products and services, market segments, and distribution channels. Your market strategy should aim for capturing an optimal market share, not market dominance.