DEFINITION of Eating Someone's Lunch
Eating someone's lunch refers to the act of an aggressive competition that results in one company taking portions of another company's market share. Market share is the percentage of an industry or market's total sales that is achieved by one company during a specified time period. A more aggressive company "eats the lunch" of another company when it takes some of its competitor's market share. This can be achieved through the release of a better or newer product, aggressive pricing or marketing strategies or other competitive advantages. When these strategies result in one company having a bigger market share for a particular product or service, the company enjoying the larger market share is said to be eating someone's lunch.
BREAKING DOWN Eating Someone's Lunch
Eating someone's lunch generally refers to defeating or outwitting an opponent. In the business world, it describes situations where one company outperforms another and earns a larger market share. Eating someone's lunch is considered a necessary component of a competitive market, and may help bring better pricing and services to consumers as companies compete for larger market shares. A company may eat someone's lunch at one point in time, only to have their own lunch eaten during a subsequent time as competitors fight back for market share.
Example of Eating Someone's Lunch
For example, XYZ Company has seen their industry mature and their organic growth taper off. Where there used to be dozens of small companies in XYZ Company's industry, the industry has shaken out and now there are only a few large companies with established chunks of market share. XYZ Company wants to establish dominance and take market share from their competitors, so they begin to lower their pricing while developing a new technology that, if patented, will place their product head and shoulders above their competition at a lower price point. They will be eating their competition's lunch and getting all of their market share.