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Market share is the percentage of the total revenue or sales in a market that a company's business makes up. For example, if there are 50,000 units sold per year in a given industry, a company whose sales were 5,000 of those units would have a 10 percent share in that market.
In economics, market concentration is a function of the number of firms and their respective shares of the total production (alternatively, total capacity or total reserves) in a market. Market concentration is the portion of a given market's market share that is held by a small number of businesses.
Formula. where is the market share of firm in the market, and is the number of firms. [8] Therefore, in a market with 5 firms each producing 20%, the HHI would be . The Herfindahl Index ( HHI) ranges from 1/ N (in case of perfect competition) to 1 (in case of monopoly ), where N is the number of firms in the market.
Concentration ratio. In economics, concentration ratios are used to quantify market concentration and are based on companies' market shares in a given industry. A concentration ratio (CR) is the sum of the percentage market shares of (a pre-specified number of) the largest firms in an industry.
Market Share is the breakup of market size in percentage terms, to help identify the top players, the middle and the "minnows" of the marketplace, based on the volume of business conducted; Market Segmentation Some of the factors that determine the market are price, quality, speed of service, ease of maintenance, and points of distribution.
Relative Market Share (%) = 100 * Brand’s Market Share ÷ Largest competitor’s market share. Relative market share can also be calculated by dividing brand sales by largest competitor sales because the common factor of total market sales (or revenue) cancels out. See also. Market share; Growth-share matrix; References