Market share is a self-reinforcing feedback loop

If you’re a consumer brand selling wholesale, gaining or losing market share can cause you to enter into a positive or negative self-reinforcing feedback loop:

• If you’re gaining market share, that gives buyers justification for giving you more shelf space, which causes you to gain even more market share.
• If you’re losing market share, buyers may want to “cut their losses” and give you less shelf space, which causes you to lose even more shelf space.

This phenomenon happens because building market share requires physical availability, and it’s the perfect example of how Reinforcing feedback loops can be self-enhancing or self-destructive.