market share

noun
Updated on: 19 Nov 2017

Definition of market share

:the percentage of the market for a product or service that a company supplies

Examples of market share in a Sentence

  1. The company has gained market share in the past year.

  2. companies working to increase their market shares

Recent Examples of market share from the Web

These example sentences are selected automatically from various online news sources to reflect current usage of the word 'market share.' Views expressed in the examples do not represent the opinion of Merriam-Webster or its editors. Send us feedback.

First Known Use of market share

1954


Financial Definition of MARKET SHARE

market share

What It Is

Market share refers to a company's portion of sales within the entire market in which it operates. This metric indicates a company's size within its market.

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

noun

Definition of market share for English Language Learners

  • : the percentage that a company has of the total sales for a particular product or service


Law Dictionary

market share

noun

legal Definition of market share

:the percentage of the market for a product or service that a company supplies


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