There are all sorts of considerations that retail investors and traders need to take into account before they decide to invest in a company. While the most obvious ones — such as the price of the company’s shares and how well the stock is performing on the stock market — get the most attention, they aren’t the most important factors to keep in mind when deciding whether or not to invest. One of the most overlooked key indications of a stock’s potential to succeed is its market share.
Market share is the trusted way to tell how competitive a company is and how successful it is in comparison to its direct competition.
The greater the market share, the more profitable the company is, and the more profitable the company is, the more viable it will likely be as an investment.
The same goes for companies that aren’t publicly traded yet — If the market share is high, then retail investors and traders can likely depend on the company’s stock to perform well whenever it eventually goes public.
Take Dyson, for example: The notable and innovative household appliances brand isn’t publicly traded yet, but its market share could indicate a must-have stock upon its eventual debut.
Who Is Dyson’s Target Market?
To understand Dyson’s market share, it’s important to first define who exactly Dyson’s target market is — that way, we can more accurately determine how much of that market Dyson dominates.
Judging by its cutting edge technology and its highly innovative household appliances like vacuums, fans, and blow dryers, Dyson’s target market is consumers in search of high-end, one-of-a-kind products that far exceed similar products in both its technology and its price point.
Dyson’s customer avatar doesn’t fear a big price tag if it means getting a product that completes a household task far better than anything the competition can provide.
Beyond this, Dyson’s target customer also appreciates products that are energy efficient, HEPA certified, and, most importantly, products that are effective for the long run.
What Market Does Dyson Operate In?
By and large, Dyson operates in America and Europe — that doesn’t mean that the company isn’t elsewhere, though.
While the company is by far the most profitable in the United States, the United Kingdom, and the rest of Europe, Dyson has a significant hold on the market in Asia and the Pacific and has shown promise in Latin America and the Middle East, as well.
This is a real testament to the quality and the notability of its products: Dyson has a hold on the world, thanks largely to the exceptional services the market knows the company can provide.
Of these regions, Dyson’s customer base consists mostly of households. These families and individuals range anywhere from young adults to senior citizens, but not very many teenagers at all — this is mainly due to the fact that Dyson’s products are far outside the price range of a teenager, and besides, there aren’t many teenagers out there in search of high-end vacuums or fans, anyway (though it’s possible that some may be interested in Dyson’s line of hair care products).
There are plenty of commercial customers, specifically those who stock their facilities with Dyson’s hand dryers, but the household customer base far exceeds them.
How Profitable Is Dyson?
Given the dependability and notability of its products and the high price point at which they sell, Dyson is remarkably profitable: The company made a net income nearly a billion dollars in 2020 alone.
This is exceptional, even after losses of almost a quarter of a billion dollars that came from abandoning such ambitious projects as its rumored car experimentation.
What’s more, the company’s annual revenue before accounting for losses and expenses has increased by around a billion dollars every year since 2015: Dyson has leaped from $1.74 billion in 2015 to $5.4 billion in 2019, with nowhere to go but up. The company is currently valued at nearly $20 billion USD.
Is Dyson a Market Leader?
With all these factors in mind, it’s easy to see that Dyson is very much a market leader. Looking at Dyson’s vacuum cleaners alone, the company commands 50% of the market in the United Kingdom and remains the best-selling vacuum brand in the United States.
Despite Dyson’s command of the markets in America and Europe, the company does face some serious competition in the Asian and Pacific market: both Samsung and LG Electronics have been gunning for Dyson’s top spot with their own variations on the cordless vacuum, and have actually managed to knock Dyson down a few pegs in this market.
While this isn’t the case in the U.S. or the U.K., this isn’t to say that it couldn’t eventually happen in these markets, as well. For now, though, Dyson remains a market leader in much of the world despite the burgeoning competition.
What Is Dyson’s Market Share?
We know that Dyson is facing some stiff competition in some of the Asian, Pacific, and Middle Eastern markets, only managing to hold onto a market share of around 20-40% at most with much of the competition surpassing the company, but that’s not the case at all in America and Europe.
In the UK, Dyson is by far the most popular and successful vacuum cleaner on the market with a share of over 50%. Its closest competition, Hoover, doesn’t boast even a third of that.
In the US, the story is quite similar: Dyson’s market share here is 27%, but it’s still the top brand. This small number still managing to have the most market share is due to the sheer amount of American competitors in the mix. This is great to know, should Dyson ever go public.
The author has no position in any of the stocks mentioned. Financhill has a disclosure policy. This post may contain affiliate links or links from our sponsors.