An In-Depth Look At Market Share

An In-Depth Look At Market Share

"What is the market share?" is a question many businesses ask when trying to understand their position in the market. To answer the question simply, what is the market share? Market share is the percentage of an industry's sales that a company owns. 

You strive to grow your business and outperform your competitors as an entrepreneur or business owner. To accomplish these goals, you need to understand what the market share definition is and how it impacts your business. This comprehensive guide will help you understand what the market share is and its significance and explore strategies for expanding your market share. 

What Is The Market Share?

Market share meaning refers to the percentage of an industry's sales that a company owns. It's the total amount of revenue a business makes from selling its products and services in that industry. Companies with more significant market shares are usually industry leaders and compete with smaller ones.

In the context of share market, the market share definition can be summarised as a percentage of the market you control according to your product or service sales. However, let’s better understand the market share meaning with an example.

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Table of Content

  1. What Is The Market Share?
  2. Understanding Market Share Meaning With Example
  3. What Is The Significance Of Market Share?
  4. How To Expand Your Market Share
  5. Conclusion

Understanding Market Share Meaning With Example

The market share of a business tells you how big or powerful it is within its industry. Market share definition is better understood by dividing your total sales by the total sales of the sector or market you're in. Moreover, when a company maintains its share over time, its revenue also grows.

Say consumers buy 100 T-shirts, 70 from company X, 25 from company Y, and 5 from company Z. Then, company X owns 70% of the market and is the leading competitor in the industry. Furthermore, market share is typically calculated for specific periods, such as yearly or quarterly sales.

What Is The Significance Of Market Share?

With a better understanding of what the market share means, let's see why it's vital in business. Well, it's essential for your business to increase its market share, and here's why:

Economies of Scale

Gaining a larger market share allows you to operate on a larger scale, which increases profitability and cost advantages. As a result of a broader customer base, you can reach more people and generate higher sales, allowing you to benefit from economies of scale.

Expanded Customer Base

As your market share grows, so does your customer base. Usually, larger companies attract more customers since people trust and prefer well-established brands. Increasing your market share improves your visibility and reputation, resulting in increased customer loyalty.

Enhanced Goodwill

When your company has a higher market share, potential customers see you offer high-quality products or services. You are believed to have captured a significant market share because you deliver superior value. In turn, this perception builds brand loyalty and promotes brand advocacy.

Increased Bargaining Power

You can exert more influence within your industry if you have a high market share. This leverage allows you to set prices, influence industry trends, and shape market dynamics. You could even influence other companies to follow your lead, maintaining your dominant position and exerting greater control.

How To Expand Your Market Share

As a company, you need to increase sales efforts and use additional or new strategies to increase your market share. There are several strategies that companies can use to increase their market share, including:

Identifying Your Niche And Creating Products Around It

Focus on the unique characteristics of your company that make you stand out from the competition. Find out what makes customers remember your products and keep them coming back. It will help increase your market share if you incorporate these things into your products.

Identifying Your Direct Competitors

Market understanding is the first step to increasing market share. Know what your competitors are doing and how they compare with your offerings. Try to fill any gaps in your offerings through unique and innovative means. 

Customer Engagement Is Key 

Engaging with your customers makes sense since you're trying to increase your market share. Asking your customers through a survey or social media is a great way to discover what else your company can do for them. Moreover, when customers feel you're interested in their feedback, they're more likely to buy from you and recommend your products to others.

Hiring Skilled Employees

By hiring skilled employees, you can increase your sales and market share. Identify individuals who have experience in your industry and can contribute to your company's success. Also, hiring former competitors' employees with market knowledge could be beneficial, as they can provide unique perspectives that could contribute to your profitability.

Acquiring Small Businesses

Gaining market share by acquiring small businesses or competitors can be an effective strategy. By acquiring these companies, you can instantly expand your market presence by tapping into their customer base, sales, and market share. You can use this strategy to consolidate your market position and outperform your competitors.


For business owners and entrepreneurs seeking to succeed in their respective industries, understanding what the market share is crucial. Market share definition refers to the percentage of sales a company holds, indicating its position and competitiveness. Moreover, different strategies can be employed to increase market share. It involves identifying a niche market, understanding and outperforming direct competitors, engaging with customers, hiring skilled employees, etc. Additionally, the blinkX share market app provides real-time market data, news updates, and analysis to help you monitor your share.

What Is The Market Share FAQs

Market share is how much of a customer's total purchase goes to a company. For example, if 100 people buy soap, and 40 come from X company, X Company holds 40% of the market.

To calculate market share, divide the company's total revenue by the total sales for the whole industry.

In relative market share, companies compare their market share with that of their biggest competitors. The leader's market share is used as a benchmark when comparing it with smaller competitors.

A company's market share is significant because it provides executives with information about market growth and decline, identifies key trends in consumer behaviour, and signals its market potential.

There are two types of market share: volume and value.