Market share analysis
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Market share analysis is an important indicator of how well a firm is doing in the marketplace compared to their competitors. The result of the analysis is very useful to help decide new strategies for an already released software product. Givon, Mahajan, and Muller have researched spreadsheet and word processing software firms to give a clearer image of how to determine market share in the software industry. They propose six factors to help estimate the value of market share (1997):
- unit or dollar sales
- user base (since piracy and brand switching effect)
- market definition(scope of definitions)
- scope of denominator(which other brands included)
- time frame length
- product definition (brand, product line, or strategic business unit)
Determining a software firm’s market share can help determine where it is today and where it wants to be. Also, it helps the firm to relate itself to the offerings of its competitors and to see how successful it has been competing for market share.
[edit] Reference
Givon, M. Mahajan, V. and Muller, E. (1997). "Assessing the Relationship between the User-Based Market Share and Unit Sales-Based Market Share for Pirated Software Brands in Competitive Markets.". Technological forecasting and social change 55 (2): 131-144.
