market share

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Market share

The percentage of total industry sales that a particular company controls.

Market Penetration/Share

The percentage of an industry or sector that a single company controls. For example, if Retail Company A conducts 10% of all retail sales in the United States, it is said to have a 10% market share or penetration. It is important that a company, especially a large company, maintains a substantial market share in order to remain competitive. However, companies that achieve too high a market share through mergers, acquisitions, or other methods may become regarded as monopolies and violate local antitrust laws. Some companies have a large market share compared to their competitors, but not enough to be considered a monopoly: these are called gorillas. See also: Herfindahl-Hirschman Index.

market share

The proportion of industry sales of a good or service that is controlled by a company. Some investors prefer companies with relatively large market shares because they are generally less likely to be squeezed by competitors.

Wall Street Words: An A to Z Guide to Investment Terms for Today's Investor by David L. Scott. Copyright © 2003 by Houghton Mifflin Company. Published by Houghton Mifflin Company. All rights reserved. All rights reserved.

market share

the proportion of total sales of a product accounted for by an individual BRAND of the product or all brands of the product offered by a firm in a particular MARKET.

A firm's market share relative to competitors' market share provides an indicator of its success in marketing its brand(s) over time. Some minimum market share may be necessary to achieve sufficient sales volume to enable the firm to produce efficiently (see ECONOMIES OF SCALE). Beyond this the firm may aspire to market leadership of the whole market or may seek to achieve high market share in one or more MARKET SEGMENTS.

Market shares can be only meaningfully related to a precise definition of the market serviced by the firm both in geographic terms (for example UK snack product sales or European snack product sales), and in product scope (for example, potato crisps and other snack products). See MARKET LEADER, MARKET CHALLENGERS, MARKET CONCENTRATION, COMPETITION POLICY.

market share

the proportion of total MARKET output or sales accounted for by an individual FIRM. Market-share data is used to measure the degree of SELLER CONCENTRATION in a market. See CONCENTRATION RATIO, CONCENTRATION MEASURES.