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Glossary keyword - Market Share

Market Share

Market share is one of the several critical market analyses that you may need to undertake, especially if you are comparing or contrasting the performance and position of different brands or products. So what is market share? Well, market share is almost always expressed as a percentage, and it is the percentage share of the overall market or market segment that is held by a product, brand, or business. The critical thing to remember is that market share can be calculated based on different numbers. For example, a company's market share can be determined by looking at the overall sales or revenues of the market in total and basing the calculations on that. It is also possible to look at the volume or the number of products that are produced or sold in the market. That is a fundamental way of calculating market share. 

Market Share Examples 

Let's look at a couple of market share examples to give you a clear idea of what market share is and illustrate what we mean by this percentage. Firstly, let's think about the global market for the shipment of personal computers. The market has changed dramatically during recent years, and now the most significant player, the largest manufacturer of personal computers globally, is Lenovo - a Chinese based firm who have twenty percent of the global market share. If we look at the remaining leading players of the market, we can see how their market share is lower than Lenovo. 

For example, HP comes second, Dell, third with 18%, and 14% of market share, respectively. We can take a look at another example by showing different types of market share information. Let's look at the global market force known as carbonated drinks - Cans of Coke and Pepsi. It is easy to guess that the largest market share belongs to Coca Cola. They have a whole range of different brands, but in total, they have just under half or 49% of the total volumes shipped in carbonated drinks globally. Pepsi, on the other hand, has a significantly lower than Coca Cola globally at 20 percent which means together the two of them account for about 70% of the global market which means that the rest of the brands are fighting for their share which is a total of only 31 percent. 

Determine Total Market Size 

When you get some information on markets and market sizes, and you are required to calculate market share, you need to be looking for the total value of the market. The first thing you need to do is to figure out the total size of the market before you start to do any calculations. You might have a list of several businesses that are the leading players in the specific industry. What you have to do is to add all the numbers up to come up with a total. This total number will be the size of the market. If you have got that information, what you can then do is to calculate the market share of each of those businesses compared with the total market size. 

How to calculate market share? 

The calculation for the market share in the business sales or product sales compared with the overall market sales expressed as a percentage. Let's say company A had a total sales of $150,000, and the full market size is 2 million. We calculate the market share by dividing $150,000 by 2 million and then multiply it by 100%. The answer - 7.5% will be the market share of business A.


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