What is market share?

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A company’s market share is the percentage of total sales inside an industry that it produces. The company’s market share is obtained by dividing its sales over a given time period by the total sales of the industry during the same time period. This metric is used to estimate a company’s size with respect to its market and competitors.

The company with the biggest market share in a particular industry is referred to as the market leader. Increases in market share can help a firm reach greater scale and profitability with its operations. Rises and declines in market share are closely monitored by investors and analysts because they can indicate the relative competitiveness of a company and its products or services.

Consumers’ preference for an item over all other similar pieces is measured by market share. Increased market share typically translates to higher sales, less effort to sell more, and a high barrier to entry for new competitors. A larger market share also means that if the market grows, the leader will benefit more than the rest.

Ways to increase market share:

  • Acquiring a competitor lessens competition and aids in the establishment of industry dominance.
  • Improvingcurrent customer relationships. Companies guarantee that their present market is protected and that their client base wouldn’t be lostdue to increased competition.
  • Lowering prices will attract more customers, allowing the company to expand its customer base and improve sales.
  • Obtain an advantage over competitors through advertising
  • Through product innovationor simply offering new technology to the market that competitors don’t have.

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Pieter Borremans
By Pieter Borremans

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