Market share refers to the percentage of a particular market that is controlled by a company or product. It is a measure of how well a company is performing in relation to its competitors in a specific market. It provides companies with a benchmark to measure their performance against competitors in a market, identify opportunities for growth and helps them make informed decisions about their business strategies. It is also used by investors and analysts to evaluate the strength of a company's position in its market.
The importance of market share lies in its ability to provide a comprehensive overview of a company's market performance. By understanding their market share, companies can better understand their customers, identify key growth opportunities, and develop strategies to increase their share of the market.
Market share is calculated keeping several factors in mind, including the total number of units sold, the total revenue generated, and the total number of customers. Other factors that can influence market share include the company's pricing strategy, marketing efforts, and product quality.