How do you calculate market share?
please will somebody help me
thanks :)
You need sales data from different companies for a specific product, from all producers. Let's say it is automobiles sold in the USA.
To get Ford's market share, divide the total sales of cars and trucks by Ford and its subsidiaries (Mercury; Lincoln) by the total revenue from car and truck sales in the USA by ALL companies. The answer will be a fraction like 15%.
You could also compute market share using data on the number of units sold, instead of dollar amount, but the answer would be about the same. In the case of manufactured products, the data could come from either retailers or producers.
Calculating market share requires knowing two key pieces of information: the company's sales revenue and the total sales revenue of the entire market or industry. The formula for calculating market share is as follows:
Market Share = (Company's Sales Revenue / Total Market Sales Revenue) x 100
To calculate market share, follow these steps:
1. Determine the period for which you want to calculate the market share (e.g., a year, a quarter, a month).
2. Gather the sales revenue information for your company during that period. This information can be found in financial statements or sales reports.
3. Obtain the total sales revenue of the market or industry during the same period. This information may be available from industry reports, market research, or publicly available data.
4. Divide your company's sales revenue by the total market sales revenue.
5. Multiply the result by 100 to express the market share as a percentage.
For example, let's say your company's sales revenue for a quarter is $1 million, and the total market sales revenue for the same period is $5 million. The market share can be calculated as:
Market Share = ($1 million / $5 million) x 100 = 20%
Therefore, your company has a 20% market share for that specific quarter.
Remember, market share is a dynamic metric that can change over time, so it's important to update the calculations regularly to stay informed about the company's performance relative to competitors.