CHAPTER 4

HOW GOOD ARE YOUR COMPETITIVE POSITIONS?

For each of your business segments, we now want to find out how strong they are in competitive terms, because our strategy will be different depending on this. 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. 1the business’s Relative Market Share (RMS) in the segment
  2. 2the trend in RMS
  3. 3the expected annual future growth rate of the segment’s market
  4. 4the ROCE (Return on Capital Employed) 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 ...

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