Market share refers to the percentage of a market controlled by a particular company or product. It is a key indicator of a company's competitiveness within its industry. Companies often strive to increase their market share to enhance their brand value, profitability, and market positioning.
Market share is crucial because it reflects a company's ability to attract and retain customers in comparison to its competitors. Higher market share generally indicates a stronger market position and can lead to economies of scale, greater bargaining power, and improved financial performance.
Market share is typically calculated by dividing a company’s total sales or revenue by the total sales or revenue of the entire industry over a specific period. The formula is: Market Share (%) = (Company’s Sales / Total Market Sales) × 100
Market share is a vital metric for evaluating a company's performance and its competitive position within the industry. By understanding and leveraging the factors that influence market share, businesses can develop effective strategies to grow and sustain their presence in the market.