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When JF persuaded a leading retail supermarket chain to trial her 'home-made' chocolate dessert range she could not have anticipated how well it would sell. Now a year on she has formed her own company, CP Company, in association with YT, who has a long history in the food sector and was himself a former supermarket manager. The company is at present operating out of rented factory premises in order to cope with the enhanced demand for the company's products from other supermarket chains.
Discuss why it would be helpful for CP Company to understand the key concepts of market size, market share and market growth.
It is important for CP Company to understand and distinguish between the concepts of growth, market share and market size when developing CP Company's competitive strategy Understanding market size will be helpful to JF as it will provide her with information of total annual sales for CP Company's market. However, JF will first require defining what constitutes the market she is operating in. For instance, will she imprison her analysis to chocolate desserts, or should she look at the total 'ready-made' dessert market.
JF could use the BCG matrix to help her set up if her products are stars (high market growth/high market share); cash cows (low market growth/high market share); question marks (high market growth/low market share) or dogs (low market growth/low market share).
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