What is a big market share

Market share

The market share is the ratio of the sales volume of a company or a product to the volume of the relevant market in one year. In the absence of quantitative information, market share is often calculated on the basis of sales.

The market share is a measure of the importance that a provider has in a market segment and is seen as an essential variable for the influence on the long-term success of a company. A distinction is made between the quantitative market share, which is expressed as a company's share of the overall market measured in turnover or sales figures, and the qualitative market share, for which, for example, the proportion of regular customers applies as a guideline.

the percentage of the total volume of a product and regional market that a company reaches in a certain period. The share can relate to sales in terms of quantity or sales in terms of value. The informative value and usability of the market share for business decisions stands and falls with the »correct« market definition.

To determine the strategic position of a company or a strategic business unit, as a rule, not the absolute, but the relative market share is used. The company's own market share is related to the market share of the strongest, in the PIMS project to the three strongest competitors. Because not the absolute amount of the market share, but only the lead in market share over the competition creates competitive advantages, e.g. by using the experience curve. In the Boston Matrix, the relative market share is the sole measure of the competitive position vis-à-vis the competition, while in other portfolio concepts, in addition to the market share, variables such as product quality, management quality, production and innovation potential or financial strength are taken into account as success factors.

The importance of market share as a strategic success factor has long been considered undisputed, but has recently faltered due to theoretical and empirical analyzes that question causality and show high potential returns even for small market shares.

The market share is a key figure for measuring the importance of a company on the market. The bigger it is, the more dominant the company is. Ultimately, it measures the competitive strength. The market share can be determined both for the sales and for the procurement market, both in terms of quantity and value.

In the health industry:

The share of a company in terms of value or quantity in a specific, delimited overall market. The market share is an important indicator of the competitive situation in an industry.

Market share now also plays a role in the hospital market. On the one hand, the market share of individual large private hospital chains is considered; on the other hand, it plays a role with regard to cartel proceedings on the relevant geographic market. However, even the largest private hospital chains today have a nationwide market share of less than three percent. Even after the inclusion of Wittgensteiner Kliniken AG, which belongs to Fresenius, the arithmetical market share of Helios Kliniken GmbH, which was taken over by Fresenius AG at the end of October 2005, is only 2.3 percent of the total market (approx 65 billion euros).

A company's market share is the company's percentage of the total market volume. A distinction is made between value and volume market share. The market share in terms of value is defined as follows:

Market share in terms of value = turnover of the company: market volume in terms of value of the service under consideration. A quantitative market share can be calculated in the same way:

Quantitative market share = sales volume of the company: quantitative market volume.

The market share provides information about the company's position on the market. With regard to the position vis-à-vis the competition, the relative market share is particularly meaningful (experience fire-vc). It results from the ratio of one's own market share to that of the strongest competitor. The change in market share is an important indicator for the company's assertion in the market.

Percentage of the bank services sold by a bank on a specific financial market or on the overall banking market in relation to the total sales of all banks on this market

Ratio of the sales or turnover volume (in quantity or monetary units) realized by the company in the planning period to the market volume of the product. The market share is an important target for the company as well as an indicator for the competitive and power relations of the respective market side (PIMS model). The determination can take place in consumer goods markets at the producer, dealer and consumer level, whereby data from retail panels and household panels are often used. When forecasting the market share for new consumer goods, the Parfitt-Collins model and the Eskin model are used, among others. The "relative" market share is sometimes used in strategic marketing planning. It is defined as the market share of the company under consideration, in relation to the market share of the two to three largest competitors. Literature: Hill, W., Marketing, Vol. I, 6th edition, Stuttgart, Bern 1988.

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