What Is Market Share And How Is It Calculated?
What Is Market Share?
Market share shows the percentage of an industry, or a markets total sales, earned by a particular company over a specified period.
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How market share is calculated?
Market share is calculated by dividing companies’ sale to the total sale in the industry over a particular time frame.
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Formula for Market Share
Market Share = Total Company Sales / Total Industry Sales
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What happens when market share increases?
Market Share allows the company to achieve greater scale with its profits. A company then use advertisings and introduce new products.
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Why is Market Share necessary?
It is basically a key indicator of a company’s growth and competitiveness. When company increase its market share, it increases its profitability.
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The bottom line
The higher the market share of the company is, the more sales it has than its competitors in the market. Market share indicates how big the company is in its industry. It is also an indicator of growth and success.
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