What does market share indicate?

Market share is a key performance metric that reflects the percentage of an industry or market's total sales that is earned by a particular company over a specified time period. This measure is crucial for companies as it indicates their relative position within the industry. By understanding market share, companies can assess their market power and competitive position against other players in the industry.

When a company has a larger market share, it typically implies greater control over the market, giving it leverage in pricing, supplier relationships, and marketing strategies. High market share can indicate strong brand loyalty, effective marketing, and economies of scale that come from higher production quantities. Overall, market share is a vital indicator of a company's strength and performance in relation to its competitors.