Measurement of market share and market growth
How is market share calculated?
Market share is calculated by dividing a company's total sales revenue or unit sales by the total market sales revenue or unit sales during a specific period. The result is then multiplied by 100 to express it as a percentage. Market share is used as an indicator of a company's competitive position and its relative size within the market. It helps businesses assess their performance, compare themselves to competitors, and identify opportunities for growth and market expansion.
What factors contribute to market growth?
Several factors contribute to market growth, including changes in consumer demand, technological advancements, economic conditions, market trends, and competitive factors. Changes in consumer demand can create opportunities for new products or services and drive market growth. Technological advancements can introduce innovative products, improve production processes, or create new markets. Favorable economic conditions, such as rising incomes or increased consumer spending, can stimulate market growth. Market trends, such as changing lifestyles or preferences, can create new niches or segments within the market. Additionally, competitive factors, such as new entrants or changes in competitive dynamics, can drive innovation, differentiation, and market expansion. Organizations need to monitor these factors and adapt their marketing strategies to leverage market growth opportunities effectively.