This article looks at how private business organizations decide on their business objectives. The most common business objectives for businesses in the private sector are concerned with:
1. Survival.
2. Growth.
6. Maximizing short-term sales revenue.
7. Maximizing shareholder value.
8. Corporate Social Responsibility (CSR).
Increasing market share
As a result of business growth, the company may achieve a larger share of the market. As gaining the market share it enjoys within its main market is closely linked to overall growth of a business.
Market share is the revenue of a single business expressed as a percentage of the total revenue of all companies operating in that market. Having the highest market share in a particular market means being the market leader.
Market share is one of the ways of measuring business size.
Increasing market share indicates that the marketing mix of the business is proving to be more successful than that of its competitors. Meaning, most customers choose the business’s products over products offered by its competitors.
Benefits of being the market leader
Here are a few benefits that result from being the biggest player on the market:
Easier promotion. Effective promotional campaigns are often based on ‘buy from us, we have the best products, we are the brand leader’. Increased market share helps to develop a strong brand image which makes it easier to sell products to consumers.
Easier distribution. Retailers are keen to stock successful and popular products because it makes it easier to draw potential customers to their shops.
Power over retailers. Market leaders may offer lower profit margins to retailers than competing brands because retail shops want to put the best-selling brands on the shelves.
Examples of the increasing market share objective
1. Increase the market share in Asia from 12% to 18% in 2021.
2. Take over two other businesses in the South America’s clothing market to increase market share to 40% in the next two years.
3. Become the market leader in Europe in selling high-definition TV sets.
If the total market is growing at a faster rate than the business itself, it means that even though the business is expanding, it will suffer market share reductions. Meaning, that the business is not growing as fast or faster than then whole market.
