jump to navigation

Market Share scales to the Market Size December 17, 2007

Posted by Darth Sidious in Business Management.
trackback

When you say it, it may sound obvious, but a lot of people forget that even if your market share changes – don’t forget that the size of the market can change as well. So just because market share increases, your revenues can still go down if the overall market size shrinks – 30% of $100M is more money than 50% of $50M.

For companies that are in cyclical industries, this is an important factor in business strategy – when the market size is shrinking, you need to grow your market share just to *maintain* the same revenue (let alone increase it).

Darth Sidious

Advertisements

Comments»

1. Tipper - December 18, 2007

Update your numbers or clarify sith math
– 20% of $100M = $20M
– 50% of $50M = $25M

But your point is very valid of course

2. Darth Sidious - December 19, 2007

Thanks Tipper! I will electrocute myself for such incompetence. 🙂


Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s

%d bloggers like this: