how market leadership works
a company can establish itself as the market leader by being the first to offer a product or service the product or service must be novel enough to attract a consumer base and then the company must keep on top of consumer preferences to maintain leadership if a company enters a market as a competitor to the first mover s it can aggressively market its own version of the product with differentiated features competitors that seek market leadership status may invest heavily in market research and product development and then use consumer information to develop attributes that improve an existing product market leaders may be able to leverage economies of scale to control market prices consumers trust market leaders and will choose to minimize risk by purchasing from market leaders market leaders have a detailed awareness of the purchasing decision makers in their customer base and leverage aggressive advertising to take advantage of that knowledge while strengthening their brand market leaders attract the highest quality development partners and are most likely to be innovative in adopting the technologies and processes that will help them continue to outshine their competition examples of market leadersmaintaining a dominant market share requires a company to not only retain its existing customers by building brand loyalty but also attract new customers who may be unfamiliar with the product or service the company may also attract the customers of competitors by figuring out the ideal combination of quality and price in this modern age of the internet it is easy to identify consumer oriented market leaders such as apple google and amazon in capital goods boeing and caterpillar are two examples market leaders have to be careful when it comes to how they use and obtain their market share if a company becomes too dominant in the market or if it seems to be abusing its position it may become subject to anti trust lawsuits microsoft once became a target of regulators for example also from an investor s perspective a market leader may not necessarily be the most profitable despite having the most market share it could be the case that the company s total expenses including product r d manufacturing costs marketing costs etc are too high to make the company the most profitable among its competitors 