Hi!

I don't understand point a) at all. The question is "Why is our market share shrinking?". So how can you make a statement that the market is shrinking? This is simply a logically wrong deduction.

On more general terms, this is a nice example why you have to always first align on the definition of your focus metric. You can not just assume something!

"Market Share" is not universally defined. The most common definition is probably "Revenue divided by Market size". But the definition differs by industry. Sometimes it is not about revenue, but about number of customers. Or about volume. Or something completely crazy, like balance sheet size (this is the case in Banking!). So before you start with anything, you have to define your focus metric.

And even if it is Revenue - decline in market share does NOT mean that revenue is decreasing! It means that the numerator (Revenue) becomes smaller RELATIVE to the denominator. So you can also lose market share with growing revenue - if the market grows faster.

Thereby, you first need to understand which situation prevails. If market share is measured by revenue:

• Is our revenue growing slower than the market? Or is our revenue actually shrinking?

Once we have clearness on this, we can outline our full structure. There are two overarching steps.

Step 1: Diagnostic (understand what has happened that has caused the market share decline, and why it has happened)

Step 2: Outline of strategic measures (what can we do to address the specific reasons identified in Step 1?)

Starting the Diagnostic means that we have to explore revenue in terms of why we are underperforming relative to our peers.

1. Firstly we disaggregate revenue into its conceptual drivers: Price and Volume.
2. Then we check, what is the numerical driver of the market share loss: are we underperforming in terms of pricing, or are we underperforming in terms of volume sold
3. Once we know what causes the problem on the first level, we dig deeper. So if, for example, we are underperforming in terms of volume, we have to ask ourself "What determines the volume sold?". Or in other words, what is important to customers? And how strong are we regarding these customer-relevant aspects compared to our competitors? (for example, if there is an increasing need for post-sales support services --> how good are we in providing this?). The result of this assessment gives us a clear view on where our pain point lies. This marks the of the overarching Step 1 (Diagnostic)
4. Once we understand the pain point(s), we can start to outline specific solution ideas to address these very pain points (and only these pain points!). This is the overarching Step 2.

I hope this helps.

Cheers, Sidi