Formula for Market Share
The formula for market share is given below. This calculation will provide an overall picture of the position of a company in its respective industry.
Market Share = ( Total Company Revenue / Total Industry Revenue ) x 100
What is Market Share and How to Calculate it?
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.
Table of Content
- Why is Market Share Important?
- Formula for Market Share
- How do You Measure Market Share?
- Benefits of Market Share
- Impacts of Market Share
- How can Companies Increase Market Share?
- What Strategies are Used to Gain Market Share?
- Conclusion
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