Market Share Analysis Needs to be Very Focused
In our news release last week, we wrote about the importance of the competition
in determining profits: Profit Margin Depends on the Competition
http://home.mcilvainecompany.com/index.php/47-news/1662-nr264
Why do the leaders have a perceived lowest total cost of ownership? Flow and
treat companies often have many
products serving many industries. The factors which determine cost of ownership
vary among products and industries. So the competitor market share has to be
matched to the product which directly competes.
The biopharmaceutical industry is booming. Sales of peristaltic pumps are
growing at double digit rates. Suppliers are largely flow and treat companies
with multiple products. One of the leaders has the following market shares.
Product |
% market share |
Total Flow and Treat
|
0.2 |
Pumps |
0.4 |
Pharmaceutical pumps |
8 |
Pharmaceutical rotary pumps |
15 |
Pharmaceutical peristaltic pumps |
30 |
Regeneron pharmaceutical
peristaltic pumps (5 years) |
70 |
Despite Flow and Treat revenues of more than $1 billion the company has only a
0.2% market share in this broader market. Its share of the pump market is well
less than 1%. However, it has
an 8% share of the pharmaceutical pump market. There are six types of
rotary pumps of which peristaltic is one. This leader has a 30% share of this
product segment but just in pharmaceuticals. Its share with certain customers
such as Regeneron is 70% or more.
Certain aspects of the pharmaceutical peristaltic pump market are unique at the
present time. One is the value of
early delivery. With the need for much greater vaccine production, the demand
for peristaltic pumps is extending delivery dates. So this is a cost of
ownership factor which needs to be considered.
By determining niche market shares and the unique cost of ownership factors for
each niche, a flow and treat company can successfully pursue
increased profits.
Market share analysis is included in the various McIlvaine market reports
including Pumps: World Market
http://home.mcilvainecompany.com/index.php/markets/water-and-flow/n019-pumps-world-market
Bob McIlvaine can answer your questions at 847 226 2391
rmcilvaine@mcilvainecompany.com