What Is Market Share & How Do You Calculate It?


Within the advertising and marketing business, you’ve got doubtless heard the time period “market share” sometimes, however what does it imply? Why is it obligatory, and the way is it calculated?

As entrepreneurs, it is necessary to know market share so you understand how your organization ranks towards rivals and might develop new advertising and marketing methods to succeed in extra potential clients. On this submit, we’ll define what market share is, calculate it, give real-life examples, and clarify how one can improve yours.

What is market share?

Market Share Formula

Relative Market Share 

Relative Market Share Formula

Market Share Examples

How to Expand Your Market Share

Understand Your Market Share to Increase Business Success

Master your market research with these free templates.

Suppose shoppers purchase 100 T-shirts, and 70 are from Firm A, 25 from Firm B, and 5 from Firm C. In that case, Firm A owns a market share of 70% and is the main business competitor.

Market share is often calculated for a selected interval, like yearly or quarterly gross sales, and is typically separated by area.

Market Share Formulation

formula that you can use to find your business market share

Calculating your market share gives you an total understanding of your place within the business, however it’s additionally useful to know the way you measure as much as your direct rivals.

Relative Market Share

Relative market share compares your efficiency to business leaders.

Quite than utilizing whole business income, you’re dividing your market share by your high competitor’s market share, multiplying the outcome by 100. The outcome will present you the portion of the market you personal in relation to your most vital competitor. The picture beneath reveals the relative market share method.

Relative Market Share Formulation

mathematical formula that is used to calculate your business relative market share

Market Share Examples

It might be simpler to know market share with real-life examples, so we’ll go over some beneath for companies you might already be acquainted with.

Nike Market Share

Nike is a part of the athletic footwear and attire business, promoting varied sports activities tools, informal sneakers, and equipment.

Nike’s international market share in sportswear is estimated to be 43.7%. The model is an business competitor for Adidas and Underneath Armour.

Tesla Market Share

Tesla is a part of the automotive business and produces electrical automobiles (EVs). Inside the U.S. EV business, Tesla holds an over 70% market share.

It is important to acknowledge that the marketplace for EVs worldwide is considerably smaller than normal automobiles. EV’s market share within the vehicle business is 2.8%, and Tesla’s is .8%. These variations are important, so it’s vital to research relative market share to match your corporation to your direct rivals relatively than simply the market as a complete.


Spotify is a music-streaming platform and has the very best music-streaming market share with 31% of the market.

The second-highest market share belongs to Apple Music (15%), adopted by Amazon Music (13), Tencent (13%), and YouTube (8%).


E-commerce firm Amazon has a U.S. e-commerce market share of 37.8% and is the main on-line retailer within the nation. Second place belongs to Walmart with 6.3%, and third place goes to Apple with 3.9%.


Most up-to-date statistics present Goal is the most important division retailer retailer within the U.S. with a 38% market share. Walmart and Macy’s each rank second with 13%.


Chew is a web-based pet product and meals retailer with a market share of 40% within the U.S. The corporate plans to increase into the worldwide market in 2024 and is anticipated to achieve a 20% market share outdoors of the U.S. by 2030.

Google Market Share

Google has a market share of 92.37%, making it the most well-liked search engine on the earth. It dominates the competitors, because the second-largest business chief is Bing with a market share of simply 3.57%.

When you’ve calculated your market share and perceive the way you relate to your business rivals, you possibly can start strategizing improve your total income.

How To Increase Your Market Share

Under are a couple of methods your organization can use to expand your market share.

1. Decrease costs.

A good way to compete in your business is to supply low costs. That is the low-hanging fruit of increasing your market share as a result of shoppers sometimes search for lower-cost merchandise.

Nonetheless, it is also necessary to notice that a budget choice is not proper for each model. You need to be sure that you’re pricing products appropriately to offer worth to clients however not lose out on income alternatives to beat the competitors.

2. Innovate new merchandise and options.

Corporations innovating and bringing new know-how to the desk typically see their market share improve.

New merchandise and options appeal to new clients, also called acquisition, which is a driving issue for producing income. New clients make new purchases and, in flip, contribute to increased revenue margins and bigger contributions to total business income. Extra important contributions instantly translate to elevated market share.

3. Delight your clients.

Top-of-the-line methods to develop your market share is to work on current buyer relationships.

You’ll be able to encourage customer loyalty by delighting present clients by offering distinctive experiences and buyer loyalty. Loyal clients usually tend to make repeat purchases, which will increase your corporation income and contribution to whole business income. As talked about above, increased income contributions equal the next market share proportion.

4. Improve model consciousness.

Branding awareness and nationwide advertising and marketing play a major position in capturing market share. Getting your identify out there’s necessary, so clients know who you’re. Changing into a family identify and the popular model in an business will assist improve your market share.

Typically, bigger firms have the very best market share as a result of they’ll present services extra effectively and successfully.

However why is that this so necessary? Under, let’s work out what impression market share can have in your firm.

Market share is extra necessary in industries which can be primarily based on discretionary earnings. Market share would not all the time have a major impression in consistently rising industries. Nonetheless, it is necessary to do not forget that an organization can have an excessive amount of market share — also called a monopoly.

For instance, with rising industries with a rising market share, firms can nonetheless improve their gross sales even when they lose market share.

Then again, with discretionary earnings industries, equivalent to journey or non-essential items like leisure and leisure, the economic system can considerably impression market share. Gross sales and margins can fluctuate relying on the time of yr, which means that competitors is all the time at an all-time excessive.

Increased competitors typically results in dangerous methods. As an illustration, firms is likely to be prepared to lose cash quickly to drive rivals out of the business and acquire extra market share. As soon as they’ve extra market share, they’ll increase costs.

Perceive Your Market Share to Improve Enterprise Success

Decrease market shares can let you realize that you should concentrate on buyer acquisition, advertising and marketing to lift model consciousness, and total methods to extend income. Increased percentages point out that your present plan is satisfactory and that it’s best to concentrate on customer retention and product innovation.

Whether or not your organization is well-established or simply beginning, it’s necessary to know your business standing as it would make it easier to meet enterprise aims and obtain desired success.

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