Market share

Market share refers to the portion or percentage of total sales or revenue that a particular company or product captures within a specific industry or market. It is a key performance indicator used to assess a company’s competitive position and its relative strength in relation to other players in the market. 

The formula for calculating market share is:

Market Share =  (company’s sales or revenue / total market sales or revenue) x 100

This formula provides a percentage that represents the company’s share of the total market.

Market share is a crucial metric for assessing a company’s competitive position within its industry. A higher market share indicates a stronger presence and influence in the market. It allows companies to compare their performance with the competitors. A company with a higher market share may be seen as the industry leader.

A high market share can be an indication of brand strength and customer loyalty. Customers may perceive a company with a large market share as more trustworthy and reliable.

Types of market share:

  1. Overall market share: This refers to the company’s share of the entire market, encompassing all competitors and products within a specific industry.
  2. Segment market share: Companies can also analyse their market share within specific segments or subcategories of the market. 
  3. Geographic market share: Companies may evaluate their market share within specific geographic regions or countries, especially if they operate in multiple markets.

A high market share does not necessarily guarantee profitability. It’s possible for a company with a large market share to still be unprofitable if its costs are too high. Some companies may operate in niche markets where they have a small market share but a strong and profitable presence.

Ready to grow your business?

Clever finance tips and the latest news

delivered to your inbox, every week

Join the 70,000+ businesses just like yours getting the Swoop newsletter.

Free. No spam. Opt out whenever you like.

We work with world class partners to help us support businesses with finance

Looks like you're in . Go to our site to find relevant products for your country. Go to Swoop No, stay on this page