Market Dominance When a Company

Market Dominance When a company enters a field, one of its objectives may be market dominance depending on its capacity and size. Even after many years in business, a company may decide to expand and aim for a position higher than what it currently enjoys. There are around four market dominance strategies that a company can take in order to improve its market share and reach the position it is aiming for.

Market Leader Market leader as the term suggests is the company with the highest market share in its field of operation. Even though it may be a market leader, it is possible that the company is not dominating in all its segments. For example in one segment, it might have 65% market share but in another, it has only 20% or less. So while it is a market leader, the margin of dominance may not be very wide and hence the company may not actually be a completely dominant player.

For example in the field of pharmaceuticals, Merck is a market leader but Pfizer is a close competitor and while Merck is the leader, it is not exactly dominant by a wide margin. Since competition is still fierce for Merck and the company needs to adopt some important strategies to maintain or expand its position as a market leader. Market Challenger: A market challenger is a firm that has relatively smaller market share but can compete with the leaders in terms of resources and capacity.

A challenger thus goes for an all out attack against the leader in order to gain market share. In the field of pharmaceuticals, for example, Merck would be seriously challenged by Pfizer because both companies are massive in size and are targeting almost the same areas. Some of the strategies attained by a challenger would include Frontal attack (offering new and better products at lower price) Leapfrog (offering treatment in previously untouched areas), Flank (reach a new segment of market) and encircle (develop a niche).

Market Nicher: A company may choose to focus on one single segment and hence achieve the title of a specialist. The company is still trying for domination but only in its selected areas. It doesn't want to compete in every.