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Share Increasing Strategies

Essay by   •  June 13, 2011  •  Essay  •  706 Words (3 Pages)  •  1,792 Views

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Share Increasing Strategies

The purpose of this type of strategy is self-explanatory and is to increase share significantly and permanently. They are usually designed to alter the competitive position of the business involved. When businesses embark on this type of strategy they usually aim to increase their market share by more than 50% of what it currently is and often as high as 100 to 150 percent of current market share. This type of strategy involves large investments to achieve the goals and so businesses attempting to increase market share to this extent must be able to attract capital in addition to that generated by the business itself. Changes often include horizontal mergers with other companies and if this is not an option then the business will need some major advantages over existing competitors to achieve large changes in share.

If the product/market is in the development stage, competition in many industries revolves around product design, product positioning and product quality. If it is in the shakeout phase competition revolves around product features, market segmentation, pricing and distribution and service effectiveness. These guidelines apply to all industries.

Although market share changes usually occur in the development or shakeout stages, it has to be noted that major changes in market share can occur in other stages of the product/market evolution:

If the leader stumbles or

A sudden breakthrough in product form technology occurs or

The business is willing to make major investments to develop advantages over time or

The business is willing to make sustained efforts to develop advantages over time

Growth Strategies

These occur in the Growth stage of market evolution and are designed to preserve the firm's existing competitive position in a very rapidly expanding market. Major market growth usually occurs during the early stages of product/market evolution and a growth strategy has two important features:

The acquisition of resources needed to grow with the market so the business can maintain its current position

The development of new types of competitive weapons that the business will need to continue competing effectively as the growth slows and shake-out begins.

Often a company will concentrate on the first feature, which will leave it unprepared to maintain growth in the competitive environment when shake-out begins and there are different types of competition.

The reason that most companies do not concentrate on developing strategic skills is that the growth in the initial phase requires the firm to concentrate their efforts on obtaining

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