Benefits of Market Share

1. The investors and the financial analysts closely examine the fluctuations of the market share as it signifies the relative competitiveness of the products or services of a company.

2. A company that is growing its market share can grow its sales faster than its competitors.

3. With the growth of the total market share of a particular product or service, if a company can maintain its market share, then this means it can generate revenue at the same pace as the growth of the total market.

4. An increase in the market share can help a company to obtain a larger scale in its operations and increase profitability.

5. To increase a company’s market share, it can either lower the price of its products, use promotional strategies, or introduce new products in the market.

6. The company can also increase the size of its market share by expanding its target audience or other demographics.

The part or percent or amount of a market obtained by a company is termed the Market share. In simple words, market share defines the total sales of a company compared to the total sales of the entire industry in which it operates. This gives a proportionate percentage of the company among its operating industry. If market share is viewed from the customer’s perspective, then market share would be the percentage a company holds among all the purchases made by the customer in a particular product or service. For example, if a consumer purchases 100 bottles of shampoo as a whole and a certain shampoo maker sells 30 bottles, then the particular company holds a 30% market share. This calculation of the market share holds a company’s total sales over a particular time frame and the total sales of the industry operating within that period.

Geeky Takeaways:

• Market share is the part or percentage of a market gained by an organization or a company. The total sales of a company about total sales of the industry is the market share of the company.
• If market share is viewed from the customer’s perspective, then market share would be the percentage a company holds among all the purchases made by the customer in a particular product or service.
• This calculation of the market share holds a company’s total sales over a particular time frame and the total sales of the industry operating within that period.
• The company that has the highest market share and usually holds the maximum influence over the market is known as the Market leader in an industry.
• There can be two types of market share: Value share and Volume share.