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What strategies do companies use to increase market share?


A company's market share is the proportion it controls in the total market for its products and services. Market share is an essential measure of business activities as it is an indicator of a company's profitability and success. It can refer to dominance in an industry and how successful a company's revenue generation efforts are in achieving business goals.

What strategies do companies use to increase market share?

Market share can affect operations, pricing of products and services, and possibly stock market performance. 

The increasing market share corresponds to the increasing revenue. This, in turn, means that the company can expand its operations and provide the opportunity for greater profitability. Gaining market share should be a serious business objective.

There are a number of strategies a company can put into action to increase its market share. These include improving innovation, building and cultivating customer loyalty, hiring a talented and dedicated workforce, acquiring other businesses, publishing effective advertising, and efficiently pricing products and services.

The main takeaway:

  1. Market share is the company's total sales in relation to total industry sales for the same period.
  2. Market share can highlight dominance over competitors.
  3. Market share helps a company measure the effectiveness of its strategies and strategic execution.
  4. Gaining market share should be one of the primary objectives of management due to its impact on operations and profitability.
  5. The enormous benefits of market share underscore the importance of strategies that can increase it.

Understand the benefits of market share

Market share is calculated by measuring the percentage of sales or the percentage of units a company owns in the market as a whole. 

Using the percentage of sales method, if a company has $1 million in annual sales and the total sales for the year in its industry is $100 million, the company's market share is 1%. According to the percentage of units method, a company that sells 50,000 units annually in an industry where 5 million units are sold annually also has a market share of 1%.

A higher market share puts companies at a competitive advantage:

  1. Firms with a higher market share often receive better prices from suppliers, as their higher order volumes increase their purchasing power.
  2. Increasing market share and increasing production go hand in hand, with the latter providing the company the opportunity to lower the cost of producing an individual unit due to economies of scale.
  3. A higher market share can help improve sales when existing customers who are loyal to the brand buy more of the company's products.
  4. Market share may also expand the company's overall customer base as potential new customers follow the existing lead.
  5. Gaining market share can enhance the company's reputation and visibility. In addition to increased sales and increased bargaining power, this can attract more talented new employees.

Using sales, the formula for determining market share for a specific time period is (total company revenue / total market revenue) x 100. Using units sold, the formula is (total number of units sold by the company / total number of units sold in the industry) / 100

How to gain market share

What strategies do companies use to increase market share?

Market share is not just about maintaining your company's current market share. After all, as the industry grows, the company's market share must also grow to remain competitive and profitable. 

Increasing your market share is critical and involves gaining more than what you already have. This may indicate that your growth rate is greater than average and that you are outperforming your competitors.

Here are some of the areas a company can focus on to increase its market share.


Innovation that attracts customers can come in many different forms. One is a useful new technology that the company develops and introduces and continues to improve before competitors gain a foothold. 

Technology enthusiastic consumers buy and use it and can become repeat customers. Innovative technology can build a company's customer base with consumers who are new to the industry as well as consumers who are leaving another company for it.

Some other ideas for innovation to gain market share can include product innovation, production method improvements, and marketing strategies. The potential for high-value innovation exists throughout the company.

Customer Loyalty

Building and strengthening relationships with existing customers by growing their loyalty is a smart strategy to gain market share. 

First of all, the loyalty of existing customers can help prevent customers from leaving the company for others when new products are introduced to the market. Moreover, the company can expand its base through word-of-mouth marketing which is often provided by satisfied and happy customers.

Take advantage of networking opportunities with clients who want a closer connection and deepen their positive experience. An added bonus is that this organic opportunity to welcome new customers and increase market share can often come without specifically related increases in the company's marketing costs. In addition, loyal customers can sometimes share innovation ideas for products they love.

Skilled workforce

A company that focuses on attracting and retaining talented employees focuses on increasing its market share. This is because skilled employees can become dedicated employees. 

This, in turn, can reduce expenditures related to recruitment and training. Additionally, a skilled workforce that excels in their missions can allow a company to maintain its focus on producing exceptional products and sales. 

Attracting the best requires competitive salaries and a solid set of benefits, including flexible work schedule options and comfortable office settings.


To win market share and dominate an industry, a company can consider buying out its competition. This move actually offers multiple strategies to increase market share in a single action. Through acquisition, the company takes a competitor out of the market and assumes market share. 

Attracts customer loyalty. Moreover, it can put products, services, and other strategic opportunities that have already been developed through the acquisition of the business on the spot. 

If a company cannot buy another company due to financial constraints, it can consider acquiring key employees to improve its workforce and for the customer loyalty associated with these employees.


Effective and frequent advertising provides a good opportunity to gain market share. Branding and innovative marketing through advertising can capture consumers' attention, build relationships with existing customers, and stimulate widespread interest in the products and services offered by the company. 

High-impact advertising in various forms can help buyers understand and align with the company. Regardless of the advertising media used, it is wise to maintain continuity across design, sound and message to ensure a strong, positive and lasting impression. 

Companies must also ensure that their advertising is actually targeting the right market segment for their products and services.

Price cuts

Lowering prices is a powerful strategy to help a company gain market share. Low and more attractive prices can attract consumer attention and loyalty. This can lead to very important sales increase which increases market share. In addition to lowering the actual price of products, the company can consider promotions, coupons, bonus items and other customer benefits. For example, incentives such as referral programs and free shipping can generate additional interest and additional sales.

How can I improve my position in the market?

One of the ways a company can increase its market share is by improving the way its target market perceives it. 

This type of positioning requires clear and reasonable communications that influence current and potential customers with the company's identity, products, vision and desirability. In addition, you must separate your company from the competition. As you plan for such communications, keep these guidelines in mind:

  1. Research as much as possible about your target audience so that you can understand without a doubt what they want. The more you know, the better you will be able to reach and communicate the message you want.
  2. Establish your company's credibility so customers know who you are, what you stand for, and can trust them, not just your products or services, but your brand.
  3.  Explain in detail how your company can improve customers' lives through its unique, high-value offerings. Then, expertly deliver on that promise so that contact with customers can grow unimpeded and lead to new customers excited to join your base.
  4. Highlight the advantages your company offers to customers that competitors cannot match. Emphasize your expertise in what you do and why it matters.
  5. Create focused, personal messages to customers, meaningful to those who might become customers, and actionable in a way that can drive results for both the target audience and the company.

How can I attract new clients?

One way to gain market share is to gain new customers. A company can increase its customer base in several ways. Here are a few to consider:

  1. Improving marketing communications directed to potential new customers as well as existing customers.
  2. Refresh the connection with customers they haven't heard of recently with a warm welcome, special offers and discounts.
  3. Introduce existing customers to a referral program with attractive rewards as an incentive to provide contact information for their friends and family. Or, if a program isn't feasible, ask for referrals from your most satisfied customers.
  4. Have your most active clients act as brand ambassadors and actively spread the word about your company using the medium of their choice.
  5. Review your website to make sure it has the look, content, and message you want to convey. A website review is a great opportunity to explain your company's mission and goals as well as goals that have been developed to improve the lives of customers and others.
  6. Monitor sites and platforms that promote business ratings and reviews. Respond to both complaints and praise sincerely. Do their best to help those whose posts require action. Consider linking positive reviews to the company's website.

How can I prevent losing market share?

To avoid losing market share, a company must monitor its measure of market share, monitor the performance of its competitors, and take steps to improve aspects of its business that could affect its market position. 

These can include things like product and service quality and pricing, customer satisfaction, growth of their customer base, marketing, advertising, the quality of their employees, and the potential for takeover of competing firms.

Bottom Line

Increasing market share can be of vital importance to the financial health and continued success of a business. 

The company has a number of opportunities available, not only to maintain, but to gain market share. Every company must understand the value that its strong market share offers and be committed to the ongoing efforts it can take to build it.