ShareBuilder

ShareBuilder is both a methodology and a process that enables clients to forecast market share under various competitive scenarios.  The process guides the client through a discovery and audit of the factors that determine competitive success in the market over the life cycle of the product or service being studied.  Client value is derived as much from this process as from the results of the subsequent model.   ShareBuilder is broad enough to be applicable over the entire range of technology markets, yet is flexible enough to adapt to the unique aspects of the of each client case.

ShareBuilder Methodology

All technology markets have a life cycle that progress through four distinct phases:

• Phase I - The emerging phase is characterized by one or few competitors. The key competitive advantage is “uniqueness”: being first.
• Phase II - The feature phase attracts more competitors. The key competitive advantage is product or service performance: having the best.
• Phase II - The marketing phase contains many competitors. The key competitive advantage is marketing efficiency: control of the channels of distribution.
• Phase IV - The price or commodity phase has a decreasing number of competitors.  The key competitive advantage is being the low cost producer: being the price leader

The market phases can be defined in terms of penetration of a theoretical maximum market size: the total available market. The success of each vendor competing in a market is a function of how well it marshals its physical, intellectual, financial and intangible assets. Any vendor’s success in the market, as measured by its market  share can then be modeled as a function of these attributes, recognizing that attributes will vary as the market cycles through the four phases.

The choice of which vendor attributes are relevant and how much weight they should be given in each market phase will be the key decision that the Client and the Daniel Research Group will make.   These weights are based on empirical evidence and data that is owned or proprietary to the client, or acquired as part of the supporting market research augmented by the knowledge, insights and experience of the team.
Care must be taken in choosing which attributes will drive the model.  To be selected, an attribute should be:

• Controllable by at least one, and at best many, of the vendors.
• Mutually exclusive of any other attribute.
• Measurable.
• Quantifiable from data that Daniel Research Group or the client owns or can acquire.

Given a set of phase weighted attributes, Daniel Research Group and the Client can evaluate  each vendor as to its strength in each attribute. A number of different rating and scaling techniques can be used and, coupled with different computational techniques, will yield competitive scores for each vendor over the life of the market. These competitive scores, together with initial starting market share assumptions, are the inputs to the basic market share modeling algorithm.

ShareBuilder Process

This methodology can be implemented through the following process for any ShareBuilder engagement.

1. Define the market.
2. Forecast the market.
3. Define the market life cycle in terms of percentage penetration of the theoretical maximum.
4. Define the phase transition points in terms of percentage penetration of the theoretical maximum.
5. Select the set of competitive vendors.
6. Select the set of relevant attributes.
7. Weight the attributes for each phase.
8. Score each vendor’s strength in each attribute.
9. Estimate the initial market share for each vendor.
10. Determine the influence of the competitive scores versus prior market share in the model.
11. Examine the model predictions.
12. Calibrate the ShareBuilder Model to real world observations.

The methodology and the process can support many additional complexities including integration of forecast models with the ShareBuilder process and building integrated multi-market models that influence each other.