Market leader

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The market leader ( English market leader ) is a company that has the largest market share of all market participants in a relevant market in terms of market volume or quantity (number of units). On a global level one speaks of a world market leader .

General

The market leader can be a benchmark for the competitors by changing the market price or other market data ( product quality , customer service , delivery time , product guarantees ) earlier than they do. He uses action parameters and the other competitors can only react to this - if at all - with reaction parameters. The ranking on a market ( English league table ) is often a status symbol for the company; the leading providers can use this in their advertising , other competitors are merely “followers”. The goal of becoming number one in the world market for automobile manufacturers is a top priority for some corporations . In 2014, Toyota led the way in terms of sales , followed by Volkswagen and General Motors . This also applies to automotive suppliers , where Continental AG and Robert Bosch GmbH are the market leaders.

species

A distinction is made between quantitative and qualitative market leadership . The latter consists of all other criteria and leads to technology , quality or brand leadership . Since quantitative data such as market share is objective metrics and is the easiest to collect, quantitative market leadership is the most cited. The majority of medium-sized world and European market leaders use quantitative criteria to determine their market leadership: 72.6% are market leaders in terms of value, 46.6% are market leaders in terms of volume. In quantitative market leadership, a distinction is made between the absolute market share (a company's share of the total market volume) and the relative market share. The latter relates the company's sales to the sales or sales volume of the largest competitor in the industry. With a relative market share value of over 1, you are the market leader.

Business issues

Market leadership also depends on the size of the company . The larger the company size, the more likely it will be for a company to be a market leader. The market leader can realize economies of scale due to the size of his company ; he is regarded as the standard among his customers and is more likely to achieve a lock-in effect than other competitors. Market leaders often have a cost advantage over their competitors, so that the economies of scale are at least partially responsible for the market leaders' higher profitability .

The price wars in the German food retail trade show how important market shares are to companies. Due to their high market share, cash cows are often market leaders. Market leadership is usually also accompanied by price leadership , quality leadership or cost leadership . Due to the high market share , market leadership creates potential for cost savings , which are made possible through learning effects , know-how and greater market power . However, market leaders with high market shares are most likely to suffer from a loss of market share because the remaining competitors are trying to gain market share at the expense of the competition.

From a certain level of market leadership, effective competition can be noticeably impeded, which goes against the competition policy of the European Community.

literature

Individual evidence

  1. ↑ Marko Funke: Price strategies in the automotive supplier industry , 2014, p. 22.
  2. ↑ Jochen Becker: Marketing-Konzeption , 2006, p. 67.
  3. ↑ Eckart Schmitt: Strategies of medium-sized world and European market leaders , 1997, p. 152.
  4. ↑ a b Thomas Bieger , Dodo zu Knyphausen-Aufseß, Christian Krys: Business Models , ISBN 978-3-642-18068-2 .
  5. ↑ Gunnar Levknecht: Analysis approaches in strategic management , 2014, p. 12.
  6. ↑ Official Journal of the European Communities No. C 372 of December 9, 1997, 10th paragraph