NEW YORK (

TheStreet

) -- Market-share leadership in a business sector has strategic benefits for a company.

Market-share leadership gives a company the opportunity to issue press releases and publish pie charts in its annual reports because customers prefer to buy from it over its competitors. More significantly, it means that customers often come to the company for solutions because they are more convinced by leaders. Customers look up to leaders to provide them with decisions and solutions to their needs and wants. Market leadership also shows the financial community that the company is worth investing in.

Since last March, the dollar has weakened considerably, which will have an impact on market-share leadership. A weak dollar means that goods sold in dollars are less expensive. Companies with a large portion of foreign sales will benefit as their products are cheaper, providing customers with an impetus to buy more.

When global market share is compiled by analysts, it is typically calculated in dollars. If the product is sold by a foreign company in the currency where the company is based it is then converted into dollars to total up market share. This is usually a challenge because there are a variety of methods that could be used, such as the average conversion rate throughout the year or the conversion rate on Dec. 31. Either will give only an estimate of dollar revenue. The only accurate way is if a company converts each sale into dollars at the time of purchase. Complicating the conversion are multinational companies that sell in different currencies in each country where they have an office.

In the semiconductor-equipment and materials sectors, which we analyze, market leaders held razor-thin leadership positions in 2008, and exchange rates will play a big part in global positions in 2009.

Shown in the table below are 2008 market share differences between the top two leaders in three major chemical and material sectors and two equipment sectors for companies who are U.S.-based vs. foreign-based. The differences were 2.1% and less. With the top leaders in different countries, swings in exchange rates will readily tip the scale.

A weaker dollar will generally benefit U.S. companies in the calculation of global market share because revenue generated in a foreign currency will be converted to fewer dollars.

Based on the strength of the dollar for 2009, I suspect market-share leadership to be held by

Air Products

(APD) - Get Report

,

Honeywell's

(HON) - Get Report

Electronic Materials division,

OM Group

(OMG)

,

Lam Research

(LRCX) - Get Report

and

Applied Materials

(AMAT) - Get Report

.

As I've written in previous articles on

TheStreet.com

, market share in a competitive environment is sometimes also a matter of

luck

and dependent on customers' performance. If a customer underperforms and stops buying, it will impact the revenue of all its vendors up the supply chain.

-- Written by Robert Castellano in New Tripoli, Pa.

Robert N. Castellano, Ph.D, is President of The Information Network, a leading consulting and market-research firm for the semiconductor, LCD, HDD and solar industries. Castellano is internationally recognized as one of the leading experts in these areas. He has nearly 25 years of expertise as an industry analyst. Castellano has provided insight on emerging technologies to many business and technical publications, including Business 2.0, BusinessWeek, The Economist, Forbes, Investor's Business Daily, Los Angeles Times Magazine, The New York Times, USA Today and The Wall Street Journal. He is a frequent speaker at conferences and corporate events. He has over 10 years' experience in the field of wafer fabrication at AT&T Bell Laboratories and Stanford University before founding The Information Network in 1985. He has been editor of the peer-reviewed Journal of Active and Passive Electronic Devices since 1985. He is author of the book "Technology Trends in VLSI Manufacturing," published by Gordon and Breach. His book "Solar Cell Processing" was published in 2009 by Old City Publishing. He received his Ph.D. in solid state chemistry from Oxford University.