Worksheet - 1
a)The approximate two- rm concentra on ra o in the
smartphone industry of Samsung having 31% and Apple 15% is
around 46% of the market . (By adding the 31% and 15%)
b)Market share is the percentage of one rm’s share of the total
sales in the market. It is calculated using the following formula:
Market share % = Firm's Sales ÷ total sales of the market X 100
For example: Samsung market share right now 2022 is 24% of the
overall global smartphone market.
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c) Market leadership is the posi on of a company with the
largest market share or highest pro tability margin in a given
market for goods and services for Samsung it is important for
several reasons:
• Market leaders enjoy brand recogni on and brand loyalty,
which brings bene ts such as a poten ally higher customer
base and an improved corporate image.
• As Large-scale opera ons enable Samsung to enjoy the
bene ts of economies of scale from, e.g. technological and
nancial economies.
• Also posi ve correla on between sales revenue and pro t
levels, i.e. Samsung’s pro ts tend to rise as the rm gains more
market share and hence more pro ts.
• The more large rms are able to invest more in the research
and development which is essen al in Samsung’s case as it
operates in a high-tech and fast-paced consumer electronics
industry.
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• Having a larger market presence means that Samsung’s key
stakeholders, such as suppliers, shareholders, managers and
employees, are more con dent and mo vated by the company.
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• Because by being the dominant rm in the market, Samsung is
able to enjoy high market power so has price se er power.