Market - Leader Strategies: Calculon Calculators is the market leader in the
United States with 43% of the total market. It’s not always easy being
number one. First, there’s always someone trying to take your place.
Second, customers like familiarity, but they also like change. Market leaders
have to work hard to keep their image fresh, to be perceived as up to date
and relevant to contemporary consumers.
In recent years, Calculon has seen its market share slip as competitors have
chipped away at particular segments. In response, Calculon has devised a threepart
strategy. It is going to try to expand the total market, defend its current
market share, and find ways to increase its market share. It will be your job to
help Calculon achieve these goals.
I. Expanding the Total Market: Companies can expand the total market by
finding new users for their products, by finding new uses for their products,
or by getting their customers or more usage to use their product more.
Which of these choices seems most appropriate for Calculon? How would
you go about expanding the total market for calculators?
II. Defending Market Share: Calculon is constantly under attack. It can never
allow its guard to slip. In fact, its managers have put together a tactical
guide for dealing with competitors that looks more like a battle plan than a
business plan. Here are some of the options they recommend:
Position Defense. Build a strong defense around Calculon’s territory.
Flank Defense. Construct outposts to protect weak positions or to serve as
bases for counterattacks.
Counteroffensive Defense. Counterattack when Calculon is attacked.
Mobile Defense. Expand into new territories than can serve as bases for
attack or defense.
Contraction Defense. Plan strategic retreats.
III. Expanding Market Share: Of course, Calculon wants to do more than
merely defend what it has. It wants to grow. However, it needs to be
careful. Increased market share does not, by itself, translate into increased
profits. If Calculon gets too big, it might find itself in Microsoft’s position,
which is the subject of an anti-trust suit. It might also be the case that
consumers who haven not bought Calculon’s products would be
prohibitively expensive to convert. Think about it. What would your least
favorite automobile company have to do to win you as a customer? Would
it be worthwhile for that company to pursue you? Finally, companies that
pursue market share at all costs sometimes lose track of other important
considerations. You can’t buy market share. You need to earn it. The best
way to keep and expand market share is to remember what got you to the
top in the first place.
