Presented below is a sample response to a question #B for the company American Entertainment, Inc. This is for guidance only. As stressed in class, each company and their situation is different and the answers to the final question will vary considerably.

B. What does this theory recommend for this company? Explain.

The company is one of the three largest companies in the industry and it holds more than a 18% market share. Market share theory recommends that the three to five largest companies "follow Porter’s low cost strategy by providing a broad product line to the large middle market. They may also sell to the high or low ends." Also, "companies normally should not expand their niche, but should stay within it (Kulzick, 1996)."

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