Market share is a metric that measures the percentage of total sales within a particular market that are generated by a specific company or product. It is calculated by dividing the company’s or product’s sales by the total sales of all companies or products in the market.
For example, if a company’s sales are $100 million and the total market sales are $500 million, the company’s market share would be 20% ($100 million / $500 million).
Market share is important because it helps companies understand their position in the market relative to their competitors. A high market share indicates that a company or product is well-established and has a significant presence in the market, while a low market share may indicate that the company or product is less well-known or has less market penetration.
Companies use market share as an indicator of their competitiveness, as a measure of how well they are doing relative to their competitors, and as a tool to identify areas of opportunity for growth. It is also a key metric to evaluate the performance of product, brand or company over time.
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