There are three key ways companies regain market share once it has been lost: pricing changes, promotional changes and product changes. All three strategies have unique benefits – and all are risky for different reasons.
By dropping prices, companies hope to lure customers away from competitors. The benefit is higher market share, but it comes at a cost: lower margins per unit. This strategy is particularly attractive to large companies that have high economies of scale that allow them to operate at either a lower marginal cost than their competitors or that make it possible to operate at a loss if needed. It's risky because, once prices drop, it can be hard to raise them again, unless the company regains enough market share to muscle out its competitors.
Another approach is to change its methods of promotion, which can include raising the advertising budget or using the power of branding for the firm. Depending on how well company leaders identify the specific issues that need to be addressed, playing with promotional efforts can be very successful or simply a costly exercise. Retailer JC Penney (JCP) notably struggled with rebranding in the 2010 to 2012 period, while competitor Target (TGT) found success in the early 2000s by marketing itself as a "higher end" discount retailer.
Finally, a company can revamp its offerings to better meet customer needs or to provide something new. Apple (AAPL) successfully tried this tactic in 2014 by introducing the iPhone 6, a significantly revamped version of its smartphone; an instant hit, it enabled Apple to take back some of the market share it had lost to Google's (GOOGL) Android. This strategy can be combined with raising prices to introduce another aspect of differentiation or to position the company's offering as a premium product.