what is market share 
market share is the percent of total sales in an industry generated by a particular company market share is calculated by dividing the company s sales over the period by the industry s total sales over the same period this metric is used to give a general idea of the size of a company in relation to its market and competitors the market leader in an industry is the company with the largest market share investopedia candra huffcalculating market sharea company s market share is its portion of total sales in relation to the market or industry in which it operates to calculate a company s market share first determine a period you want to examine it can be a fiscal quarter year or multiple years next calculate the company s total sales over that period then find out the total sales of the company s industry finally divide the company s total revenues by its industry s total sales for example if a company sold 100 million in tractors last year domestically and the total amount of tractors sold in the u s was 200 million the company s u s market share for tractors would be 50 the calculation for market share is usually done for specific countries or regions e g north america or canada investors can obtain market share data from various independent sources such as trade groups and regulatory bodies and often from the company itself however some industries are harder to measure accurately than others market share total company sales total industry salesbenefits of market shareinvestors and analysts monitor increases and decreases in market share carefully as this can be a sign of the relative competitiveness of the company s products or services as the total market for a product or service grows a company that is maintaining its market share is growing revenues at the same rate as the total market a company that is growing its market share will be growing its revenues faster than its competitors gains or losses in market share can have a significant impact on a company s stock performance depending on industry conditions market share increases can allow a company to achieve greater scale with its operations and improve profitability a company can try to expand its market share by lowering prices using advertising or introducing new or different products in addition it can also grow the size of its market share by appealing to other audiences or demographics market share impactchanges in market share have a more important meaning in the performance of companies in mature and traditional industries where there is known and steady growth in line with the general economy in contrast changes in market share have less importance in companies operating in growth industries in these industries the total pie is still growing so companies can still be growing sales even if they are losing market share for companies in this situation the stock performance is affected more by customers and sales growth and profit margins if applicable more than factors such as market share in cyclical industries competition for market share is brutal economic factors play a larger role in the variance of sales earnings and margins more than other factors margins tend to be low and operations run at maximum efficiency due to competition since sales come at the expense of other companies they invest heavily in marketing efforts or even loss leaders to attract sales in these industries companies may be willing to lose money on products temporarily to force competitors to give up or declare bankruptcy once they gain greater market share and competitors are ousted they attempt to raise prices this strategy can work or it can backfire compounding their losses however this is the reason why many industries are dominated by a few big players such as discount wholesale retail with stores including sam s club bj s wholesale club and costco 