A market share is the percentage of total sales within an industry that is generated by a certain company. Market shares are determined through identifying company profits over a duration of time, and then dividing it by the total sales for the industry over that same time period. With this metric, it can provide a general idea of the company’s size in comparison to its competitors and the overall market. Any losses or gains in a market share can have a substantial effect on the company’s performance in stocks, depending on the conditions of the industry. 

Calculating Market Shares

As stated above, a company’s market share is the portion of sales in relation to the industry overall. If you are interested in calculating market shares for your company, you must first figure out what duration of time you want to analyze. For example, you could choose a year, several years, weeks, fiscal quarters, etc.

The second step is to add up your company’s sales within the period you want to analyze. Then, look into the total sales for companies in the industry. Lastly, take your company’s total profit number and divide it by the total sales in the industry. For instance, if your company had sold $75 million dollars in products in 2018, and the total amount sold in the United States for that same product was $300 million, then your company’s market share for that product would be 25%.

Information For Investors
In general, market share calculations are only done based on one country, such as the United States specific, Canada-only, or China singularly. Investors and analysts alike must be attuned to market share increases and decreases, as this may be a sign that there is competitiveness in that company’s goods, products, or services. As the market for a product or service rises, a company that is continuing to maintain its market share is reeling in profit at the same rate as the industry total market.

Investors who want to obtain more market sharing data based on a certain country, are encouraged to contact our Research Professionals for more details. Since some industries are more challenging to measure with accuracy, you will need access to reliable and accurate market research information.

Important Takeaways

In summary, market shares represent market total sales, or the percentage of an industry, that is accumulated by a certain company within a time period. Market shares are determined by figuring out the company’s total sales over a period of time and then dividing it by the sales for the industry in that same time frame. The market share metric is used to provide an idea of the size of a company in comparison to competitors and those within the market.

If you are an investor, business owner, or analyst, please contact our Research Professionals for more on market share reports or for information on other topics!