Market Share

Market Share: The percentage of a market accounted for by a specific entity.

 

Unit Market Share: The units sold by a particular company as a percentage of total market sales, measured in the same units.

 

This formula, of course, can be rearranged to derive either unit sales or total market unit sales from the other two variables. 

 

Revenue Market Share: Revenue market share differs from unit market share in that it reflects the prices at which goods are sold. In fact, a relatively simple way to calculate relative price is to divide revenue market share by unit market share.

 

As with the unit market share formula, this equation for revenue market share can be rearranged to calculate either sales revenue or total market sales revenue from the other two variables.

 

Diamond-Water Price Paradox

 Adam Smith [1723 – 1790] was confounded. One of the greatest economic and social thinkers in the history of ideas struggled with the so-called “diamond-water paradox,” which Smith explained in Chapter 4 of Book I of Wealth of Nations: “Nothing is more useful than water: but it will purchase scarce anything…. A diamond, on the contrary, has scarce any value in use; but a very great quantity of other goods may frequently be had in exchange for it” )quoted in Skousen and Taylor, 1997). None of us would be able to live beyond a couple of weeks without water, yet its price is relatively cheap compared to the frivolous diamond, which certainly no one needs in order to stay alive.

 

Most people confronted with this paradox – including Smith – would resolve it by replying the supply of diamonds is sparse compared to water, and hence they command a higher price. This is an intuitive, and very reasonable, solution. After all, water is approximately 71 percent of the earth’s surface, while diamonds are found in only a limited number of places in the world, and the supply is even further restricted by diamond cartels, such as De Beers, which of course did not exist in Smith’s day.

 

Yet the scarcity theory lacks explanatory power…. Besides being abundant, water tends to be priced based on the marginal satisfaction of the last quantities consumed, so the water you use to wash your car is far less valuable than the first few litres drunk to quench your thirst. Of course, if the water companies knew you were dehydrated in the desert, instead of washing your dog, they would be able to price those precious first litres at a higher price; but learning this type of information about exactly what all of their customers are doing with the water they use is prohibitively expensive. However, bottled water companies have figured out how to extract some of the consumer surplus, since they are partially selling convenience, and able to charge a higher price for water than petrol (R. Baker, Pricing on Purpose, 2006)

Collaborators

At different times in history, and under different circumstances, the word “collaborator” has connoted something negative. To be dubbed a collaborator meant you were a bad person, you had sold out your “people”, your comrades.

 

Those Black people and leaders who collaborated with the Apartheid regime in South Africa, who chose to “work within the system” were reviled because they were used as an instrument of oppression, they were used to spread the lie that there was Black self-government, they were used to institutionalise the homeland or Bantustan system.

 

In Europe, collaborators worked with the Nazi occupiers to oppress and repress their citizens. They helped to out members of the resistance, and to point out those who were hiding Jews. There are countless other similar instances throughout history and in different parts of the world.

 

In science, in tech, in business, however, collaboration is a good thing. To be a collaborator shows maturity and intelligence, especially emotional intelligence. Numerous inventions, numerous endeavours, would not have been possible, or they would have been difficult, to achieve without collaboration. Frequently many projects are only possible through collaboration. The race to build the atomic bomb in America was a collaboration of a number of eminent scientists. The International Space Station was and is a collaboration of a number of nations, including political, military and security rivals (or enemies?) Russia and the United States. In fact, for many years until late 2020, the US didn’t even have the capability to send astronauts to the ISS and had to rely on the collaboration and cooperation of Russia. The United Nations system, the World Bank and the IMF, etc., all are a result of cooperation and collaboration. The latest example are the several COVID-19 vaccine initiatives, both on the side of Big Pharma and researchers, and on the side of nations.

 

Developing a healthy regard towards collaboration is key to success and progress. While competition is also good, after all it too does drive success, it is foolhardy to disdain collaboration. We require more, not less, collaboration. We need to grow more collaborators. In science, in tech, in business, to be dubbed a 

Biden’s Hypocrisy on Iran and Cuba

During the American presidential campaign, Joe Biden made a number of foreign policy promises. For me, a non-American who didn’t matter in the scheme of American politics, the three promises that stood out and that made me supportive of a Biden win, and indeed hopeful and elated when he did win, were: Biden’s promise to reverse Trump’s decision and re-enter the Iran nuclear deal; the promise to revive contacts with Cuba and end the embargo Trump had re-imposed; and, lastly, to re-enter the Paris Climate Accord.

 

Biden has made good on the last one, immediately signing an executive order giving effect to his promise. However, for me the first two were more important in that they have been the most egregious of American foreign policies, consigning the peoples of both Iran and Cuba to the most difficult conditions and to pose existential threats to both countries. Biden’s reluctance to honour his promises in this respect are puzzling and very disappointing. CNN’s Fareed Zakaria’s take on this is that Biden is playing to a domestic audience, in particular Republicans. Whatever his reasons, his snail pace or seeming hypocrisy are unacceptable.

 

To his enduring credit, former American president Barack Obama had bucked decades of American foreign policy by signing the Iran nuclear deal and ending the Cuban isolation. 

 

When Trump came to power, he immediately reversed course on both policies. Before and during his campaign, Biden vehemently criticised Trump for these two decisions, among others, vowing to reverse them if and when he won. He hasn’t done that. Surprisingly, Biden’s new foreign and national security teams are essentially the same people who negotiated both policies under Obama. Particularly with respect to the Iran nuclear deal, they made a point of arguing that Trump’s so-called maximum pressure campaign of sanctions was not going to succeed because the deal they had negotiated was as good as it could get. Now that they are in power, however, they have hypocritically maintained the sanctions and are seeking to wring new concessions from Iran as a pre-condition to re-entering the deal. This is unacceptable and is a case of wanting to have their cake and eating it.

 

The world should call out Biden on his hypocrisy, and the other members of the Iran nuclear deal should support Iran’s position that the US is the one at fault for having pulled out and the starting point is them returning, and not the other way round as they are arguing. Clearly, at this point the only difference between Biden and Trump is that there is no imminent threat of war or missile strikes against Iran, but the suffering experienced by ordinary Iranians hasn’t changed. It would seem that, for the world, there may be no point in trusting American administrations, whether Democrat or Republican.