Market Share

Definition:

Market share represents the percentage of a company's sales within a specific market segment or the entire industry. It is calculated as the ratio of a company's revenue to the total market revenue and serves as a key indicator of a company's competitive position.

Calculation:

Market Share (%) = (Company Revenue / Total Market Revenue) × 100

Significance:

A high market share often indicates a strong market position, high customer loyalty, and competitive advantages. Companies with a large market share frequently benefit from economies of scale and possess greater pricing power.

Market Share and M&A:

Companies engage in M&A transactions to increase their market share and strengthen their position within an industry. Acquisitions allow them to accelerate growth, gain access to new customers, and improve their competitive stance.