4.1.2—Market share

Market share is a business’s sales divided by total market sales for the same period and definition. It indicates relative position, not absolute success.

Share can rise because the firm grows, competitors shrink or the market contracts. The result changes if the market boundary, units or revenue measure changes.

State the market and measure, calculate the fraction, then compare share with total market growth and profitability.

A brand sells $2m in a$20m market, so share is 10%. If the market falls to $10m while its sales stay$2m, share rises to 20% but the business has not grown.

A higher share does not automatically mean higher profit, quality or customer satisfaction.