Chapter 4. How Good are Your Competitive Positions?

You now want to find out how strong each of your business segments is in competitive terms, because strategy will differ accordingly. Assessing competitive strength is not as difficult as it sounds. Most of the insight available here can be gathered just by knowing four facts for each segment:

  1. The business’s relative market share (RMS) in the segment.

  2. The trend in RMS.

  3. The expected annual future growth rate of the segment’s market.

  4. The return on capital employed (ROCE) of each segment business.

Remember that the relative market share is the market share or sales that your firm has in the segment divided by the market share or sales of your largest competitor in the segment. Work this out now for each ...

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