Market Share

When analyzing a company, the market share is an important measure of performance, especially relative to its competitors. It represents a percentage of the market where the company distributes its products and services.

There are multiple ways of calculating the market share:

Market Share = market share

Market Share = market share

Increasing the market share is one of the main objectives of all profit-based organizations.

Attaining this objective comes with many advantages:

As tempting as this opportunity seems, there are also some disadvantages involved:

In some cases, companies can increase their profitability by decreased market share. Better selecting the customers and focusing on profitable market segment means lowering the costs that lead to high profitability.

Ways of increasing market share:

The market share in an industry determines the market concentration. If a large segment of the market is owned by the several leading companies, then the market is highly concentrated. On the other hand, if all the competitors own a relatively small market share and the market is divided between numerous competitors, the market is segmented.