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What is Market Leadership?

Malcolm Tatum
Updated Feb 21, 2024
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Market leadership is usually understood in terms of the position of a given company within an industry or market, based on three factors. When determining whether a corporation can properly be referred to as a market leader, the profitability of the company will play a major role. Along with how profitable the company happens to be, the market share volume and value will also be considered.

While market leadership does not necessarily require the highest profitability margin or largest market share in the industry, a corporation is normally expected to demonstrate a consistent level of profitability from one financial period to the next. That level of profit should be significant and represent a sizable share of the available market. When the company is able to sustain the profitability through shifts in the general economy as well as during changes within the market sector, that degree of stability is one excellent indicator of market leadership.

Market share is important to market share in two ways. First, there is the issue of market share volume. Like the profitability margin, the volume of market share does not have to be the highest in the industry, but it should account for a significant amount. An ongoing strong position will demonstrate the ability of the company to appeal to the market even in the face of changes, and is certainly an earmark of a leader.

Along with volume, any company that engages in market leadership will also demonstrate value for their share of the market. The goods and services offered by the corporation are not only priced competitively, but also have a solid reputation for high quality. From this perspective, market leadership requires the production of goods that inspire the confidence of consumers, and are available at prices that consumers consider affordable.

In recent years, a fourth indicator of market leadership has begun to emerge. The quality and stability of the members of the executive and upper management team may also distinguish a company as being a market leader. This is often considered the case when the leadership of the corporation is composed of professionals who have been with the company for many years, and have a proven record of guiding the company successfully through shifts in the economy.

WiseGeek is dedicated to providing accurate and trustworthy information. We carefully select reputable sources and employ a rigorous fact-checking process to maintain the highest standards. To learn more about our commitment to accuracy, read our editorial process.
Malcolm Tatum
By Malcolm Tatum
Malcolm Tatum, a former teleconferencing industry professional, followed his passion for trivia, research, and writing to become a full-time freelance writer. He has contributed articles to a variety of print and online publications, including WiseGeek, and his work has also been featured in poetry collections, devotional anthologies, and newspapers. When not writing, Malcolm enjoys collecting vinyl records, following minor league baseball, and cycling.
Discussion Comments
By SauteePan — On Oct 13, 2010

Sneakers41-The main criticism of Giuliani was that he did not have a participative style of leadership because he did not ask for input.

He knew what he wanted to do and how he wanted to do it. He was similar to the Principal in the movie, “Lean on Me” Joe Louis Clark played by Morgan Freedman.

This was a true story of a principal that was managing a very poor performing high school in Paterson New Jersey. This style of leadership was very autocratic which some would say bordered on offensive.

Joe Clark turned the school completely around but it was not without controversy.

But this is what great leaders do all the time. They focus on their vision and make sure that they are successful. Joe Clark and Rudy Giuliani were similar in that they wanted to turned mediocrity around and create higher expectations of those around them and their results speak for themselves.

By sneakers41 — On Oct 13, 2010

Oasis11-When Giuliani became Mayor of New York the crime rate was through the roof. Giuliani cracked down on the crime by starting with graffiti and continuing on.

He never took his eye off the ball no matter how much resistance he had. He also developed welfare to work program that actually gave people jobs that were dependent on the government.

It would have been easier for him to continue to keep the status quo, but he did what great leaders do, he shook things up when he needed to.

As a result, New York developed one of the lowest crime rates in the country. His leadership skills with respect to 9-11 were also extraordinary. He acted quickly and offered support to all of the families of the fallen firefighters. It was reported that he did not miss one funeral.

By oasis11 — On Oct 13, 2010

Sunny27-Developing leadership skills takes experience and learning from the best. Joining leadership organizations help to learn how to cope with difficult situations that all leaders face.

This is the most challenging aspect of becoming a leader and networking with like minded people can help you develop your leadership motivation and overall leadership style.

There are many leadership books out there that can give you the proper perspective of what it is like to be a leader. Many of these books can actually inspire you to be a better leader.

The book Leadership by Rudy Giuliani talks about his extraordinary leadership skills and how each difficult situation that he faced shaped him. Often true leaders face difficult situations head on and do not try to avoid them or sweep them under the rug.

By Sunny27 — On Oct 13, 2010

Anon111670- I never thought about that point.

Autocratic leadership is a strategic leadership style that creates authoritative direction with no suggestions or input from its employees.

These types of environments tend to be stressful and lead to a high level of employee turnover. While many of these types of leaders do obtain a certain level of success, they usually do so by creating a demanding environment that allows no creativity or room for interpretation.

It is said that Martha Stewart demonstrated this style of leadership and attained a high level of success. However, many say that turnover at her companies were very high as the morale was very low.

Leaders like this serve best in a very short term position in which a company has a very important deadline. This type of leader can get the job done in that situation and leave before he or she does any more damage to the employee morale.

By anon111670 — On Sep 17, 2010

Sales volumes and profit margins are not the only scales to measure the market leadership. There is another input that market players ignore and that is the number of recalls of a product/service makes a player as a leader.

Malcolm Tatum
Malcolm Tatum
Malcolm Tatum, a former teleconferencing industry professional, followed his passion for trivia, research, and writing...
Learn more
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