14:Do you think that an increase in market share will always lead to higher profits for SENG? Justify your answer[6]

[Dania]

SENG manufactures cameras. Last year its market share increased by 2% to 18%. Production is capital intensive. This allows SENG to use lean production methods such as just-in-time. Cameras have a short product life cycle. SENG spends $200m each year on extension strategies. The Marketing manager thinks that an increase in market share will lead to higher profits.

14:Do you think that an increase in market share will always lead to higher profits for SENG? Justify your
answer[6]

Possible KN Points:
>Lower prices could increase sales.
>If larger share of a smaller market.
>Larger market share due to increased sales volumes may lead to purchasing economies of scale.
>Stronger brand recognition.
>More power to charge higher prices.