Market Share

Understanding market share helps identify opportunities for growth, potential threats, and areas to gain a competitive edge.

Competitive Positioning

• Knowing a competitors’ market share helps gauge where a business stands
• Helps clarify whether you’re a market leader, a challenger, or a niche player 

Growth Opportunities

• Identifies under-served segments of a market or region
• Helps target areas for growing market share

Benchmarking

• Examines performance against industry averages or competitors
• Determines whether market penetration is above or below average and how well sales and marketing are performing

Strategic Decision-Making

• Helps decide pricing strategies, product development, marketing campaigns, or expansion strategies
• Provides context for business decisions and helps prioritise resources

Assessing Competitors' Market Share

The choice of method depends on the available data and the level of detail you need. 

Market Share Formula

Calculating market share gives the percentage of the total market controlled by a specific competitor.

• The total sales revenue or units sold by the competitor
• The overall sales revenue or units sold in the entire market or industry

Estimate Based on Volume or Units

• Estimation of market share by dividing the number of units sold by the total units in the market

Market Share by Value

• Another way to assess market share is based on market value (or revenue) instead of volume.

Sources of Data to Assess Competitors' Market Share

Share of Voice (SOV)

• Share of Voice (SOV) refers to the portion of the total advertising space, media mentions, or brand visibility
• Public Financial Reports
• Industry Reports
• Company Websites
• Trade Associations
• Customer Surveys and Sentiment Analysis
• Third-Party Data Providers
• Competitive Intelligence Tools

Challenges in Assessing Market Share

• Lack of Data Transparency
• Dynamic Markets
• Market Segmentation
• New Entrants
  

Use of Market Share Data

• Track Trends
• Identify Competitive Gaps
• Forecast Growth
• Evaluate Marketing Effectiveness

Analysis Models

Analysis models help businesses understand their position in the market, identify strategic advantages, and spot opportunities for differentiation.  Using these models, companies can make data-driven decisions to refine their marketing, product development, and overall business strategy.

SWOT Analysis (Strengths, Weaknesses, Opportunities, Threats)

SWOT Analysis helps businesses assess both internal factors

• Strengths:  What does your competitor do well
• Weaknesses:  Areas where your competitor falls short
• Opportunities:  Gaps in the market that your competitor isn't addressing
• Threats:  External factors could negatively impacting competitors

Porter's Five Forces Analysis

Porters Five Forces Model assesses the competitive forces in an industry and how they impact business.

• Threat of New Entrants:  How easy is it for new competitors to enter the market
• Bargaining Power of Suppliers:  How much power suppliers have in the market
• Bargaining Power of Buyers:  How much power customers have
• Threat of Substitute Products or Services:  Alternative products or services that replace what’s on offer
• Industry Rivalry:  Intense is the competition among existing competitors

Benchmarking

A way to assess where your business stands relative to the competition and find areas where you can improve.

• Competitive Benchmarking:  Comparing specific metrics such as market share, pricing strategies, customer satisfaction, and production costs to your competitors.
• Best-in-Class Benchmarking:  This approach looks at the best companies across all industries.  
• Functional Benchmarking:  Compares specific business functions like customer service, marketing, or supply chain across organisations. 

Competitive Positioning Matrix (Perceptual Mapping)

Competitive Positioning Matrix (or Perceptual Map) helps visualise product positioning relative to competitors based on attributes that matter to customers.  

Axes:  On a perceptual map, two axes represent different dimensions (e.g., low vs. high price, basic vs. premium features)

• Competitor Placement:  Plots a business and competitors based on where they fall on these axes

The BCG Matrix (Boston Consulting Group Matrix)

A strategic tool that helps businesses assess their product portfolio based on market growth and market share.  Products (or competitors) are in four quadrants.

Stars:  High market share in a high-growth market

Question Marks:  Low market share in a high-growth market.

Cash Cows:  High market share in a low-growth market

Dogs:  Low market share in a low-growth market

Competitive Intelligence

Competitor profiling involves gathering detailed information about competitors, including their products, pricing, marketing strategies, customer reviews, financial health, and growth potential.

• Product/Service Analysis:  Features competitive products have
• Market Strategy:  Competitors approach to marketing
• Customer Sentiment: What do customers think of competitor products

The Strategic Group Map

The Strategic Group Map helps businesses understand the competitive environment by categorising companies within the same industry based on similar strategic characteristics such as pricing, geographic scope, product quality, or customer service. 

Assessing competitors' market share is a fundamental component of competitive analysis in market research.  It provides insight into a  competitor’s position in the market but also helps you make more informed strategic decisions, identify new opportunities, and understand customer preferences.

Competitive analysis models provide valuable frameworks for understanding your competitors, their strategies.  By models like SWOT, Porter's Five Forces, BCG Matrix, and Competitive Positioning, businesses can gather a holistic view of the competitive landscape to help make more informed, strategic decisions.

 

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