How to Calculate Market Share?
Market Share(%)=(Company’s SalesTotal Industry Sales)×100\text{Market Share} (\%) = \left( \frac{\text{Company's Sales}}{\text{Total Industry Sales}} \right) \times 100
Types of Market Share:
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Revenue Market Share – Based on total revenue generated compared to competitors.
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Unit Market Share – Based on the number of units sold relative to the entire market.
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Relative Market Share – Compares a company’s market share to that of its largest competitor.
Why is Market Share Important?
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Indicates a company’s position and influence in the industry
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Helps assess competitive advantages
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Guides business strategy and investment decisions
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Higher market share often leads to economies of scale and stronger brand recognition
Example:
If a bank's digital loan services generate $10 million in revenue and the total market revenue for digital loans is $100 million, its market share would be:
(10M/100M)×100=10%(10M / 100M) \times 100 = 10\%