What is Market Share?
Market share is the percentage of the market for your product or service that you want to capture. The formula for market share is a company sales/industry sales over the same time period. To improve market share, companies may focus on strengthening customer loyalty or innovating products and services. They may also buy key competitors.
Example
- Company X sells $50 million worth of smartphones in a market valued at $200 million.
- Company Y sells $30 million worth of smartphones in the same market.
Market Share Calculation:
- Company X’s market share = ($50 million / $200 million) * 100% = 25%
- Company Y’s market share = ($30 million / $200 million) * 100% = 15%