What is market share and why does it matter?
Learn how to calculate your market share and why market share matters with Adobe Express.
Market share provides an overview of the general size of a company relative to its market and competitors. It can be a useful metric to understand how a company is currently performing.
In this article, we’ll explore the meaning of market share and why it matters in business strategy. We’ll also look at how to work out your market share with the market share formula and discuss top tips on how to increase your market share. Read on to start learning with Adobe Express.
What’s the meaning of market share?
Market share is the number of total sales within an industry/sector that a certain business accounts for. This could be the sales a particular retailer accounts for within the UK’s overall retail industry. For example, in 2024, e-commerce retail giant Amazon held over 30% market share in the UK ecommerce market.
Market share can be used to offer a generalised look at the size of a business relative to its market and competitors. Increasing market share can be a good indication of success, while declining market share could be a sign that the company is falling behind.
Companies with the largest market share in an industry are typically referred to as the ‘market leader’. For example, in July 2024, Tesco was the dominant British supermarket, with a 27.7% market share, compared to Ocado, which held a 1.8% share.
Why market share matters in business strategy.
Market share is important as it provides a closer look at your company’s current competitive positioning. This can help your business:
- Benchmark against competitors. Evaluate your business against competitors to identify strengths, weaknesses, and opportunities for improvement.
- Demonstrate your strength to investors. A good market share can show investors that your business is worth investing in.
- Monitor market growth. Analysing your market share metrics over a specific period can help you understand how your business has grown over time.
- Assess company performance. Market share can give you a good indication of how your company is performing. For example, declining market share could be a sign that your company is struggling in the market.
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What is the market share formula?
The market share formula is a calculation you can use to work out a business’s market share. It essentially involves dividing the company’s total sales by its industry’s overall sales over a set timeframe. This could be a month, quarter, or a year.
Market Share Formula
Market Share = Total Company Sales ÷ Total Industry Sales
For example, if a furniture retailer sold £200 million worth of sofas last year, and total sofa sales in the UK came to £400 million that year, the company would hold a 50% market share.
The market share is usually relevant to specific countries or regions. Market share for big companies such as large tech firms is usually calculated based on each product, rather than company sales.
How to increase market share.
There are several things you can do to try and gain a greater market share for your company. Here are five tips to help increase your market share:
1. Invest in new technology.
Investing in new technology can help you stay ahead of the curve, which could lead to increased sales. Your competitors may even follow suit, deploying similar technology to keep up.
2. Boost customer relations.
Focusing your attention on customers could lead to increased market share. Not only does customer loyalty encourage your customers to keep doing business with you, but it also prevents losing them to competitors.
3. Acquire other businesses.
If you have the means to do so, you may want to consider acquiring your competition. This can help you obtain a more favourable market share by eliminating competitors while obtaining new customers.
4. Attract skilled employees.
Skilled employees can help enhance your workforce, which could lead to increased output. Skilled employees may also bring fresh perspectives and greater expertise to your business, helping to foster innovation and drive the development of new product launches/campaigns.
5. Effective marketing.
Investing in your marketing strategies is a great way to boost your market share. Targeted advertising campaigns can help boost your sales and attract new customers to your business. However, to run successful campaigns, you’ll want to ensure you have a dedicated team on board.
How can Adobe Express help businesses explain their market share?
There are lots of ways Adobe Express can help your business explain its market share. Here are five ways you can use Adobe Express to showcase your market positioning:
Create an eye-catching business presentation.
Break down data with charts and graphs.
Market your business to investors.
Design a professional business report.
Create an informative infographic.
Communicate market share data with our AI presentation maker.
Help stakeholders understand your company’s current market positioning with the Adobe Express Free AI presentation maker. Import your presentation to the AI maker, choose a template to get you started, or start from scratch. Add in stock images, icons, or charts and graphs to convey your market share figures in a visually engaging way. Then customise further with a range of AI design tools, including the Generate text effect tool. Once you’re happy, download your presentation or present it to others in Adobe Express. Presentations are made simple with Adobe Express. Get started today, no experience required.
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