How can dominance by a business be determined?

The determination of dominance by a business can indeed be assessed effectively through both the market share it holds and the competitive landscape.

A market share of over 40% is a strong indicator of dominance, as it suggests that the business has a significant portion of the market relative to its competitors. This high market share can afford the business considerable power over pricing, influence over market trends, and greater resources to reinvest in innovation and marketing. It typically allows the business to leverage its position to establish barriers to entry, making it difficult for new competitors to emerge.

Considering the number and size of competitors also plays a crucial role in determining dominance. If a business operates in a market with few competitors or where competitors are significantly smaller, it can exert more influence over the market dynamics. In contrast, a highly fragmented market with many players could dilute any individual company's ability to assert dominance, even if its market share is substantial.

When these two aspects are combined—market share and the competitive landscape—they provide a comprehensive perspective on a business's dominance. It incorporates not just how much of the market a company controls, but also how that control is influenced by the competitive environment. Consequently, evaluating both factors is essential for accurately assessing a business's position of dominance in the market