market share
Definition of market share
: the percentage of the market for a product or service that a company supplies
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Examples of market share in a Sentence
The company has gained market share in the past year.
companies working to increase their market shares
First Known Use of market share
1954
Financial Definition of MARKET SHARE
market share
What It Is
How It Works
The formula for market share is:
Market Share = (Particular Company's Sales Revenue in Time Period X) / (Relevant Market's Total Sales Revenue in Time Period X)
Let's assume Company XYZ sells $50 million a year in widgets. If the total amount of widgets sold from all companies within the market totals $100 million, then Company XYZ has a market share equal to 50%.
Market Share = ($50 million) / ($100 million)
Why It Matters
As the market for a good or service grows, many analysts view the maintenance or increase in market share as a sign of a company's competitiveness. Increases in market share might come from innovation, broadening demographic appeal, lower prices, or simply advertising.
Sometimes a company garners too much market share and becomes part of an oligopoly or even becomes a monopoly. If this is the case, it could violate anti-trust laws and be ordered to divest assets or take some other action to increase competition.
MARKET SHARE Defined for English Language Learners
market share
Definition of market share for English Language Learners
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: the percentage that a company has of the total sales for a particular product or service
Law Dictionary
market share
Legal Definition of market share
: the percentage of the market for a product or service that a company supplies
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