Hi there in this short topic video we’re going to take a look. At an important concept when you’re looking at market analysis and it’s a concept called market share what we’ll do in this video is just. Focus on how market share is calculated rather than look at the details of the implications of market share for businesses market share of course is just one of several important market analysis calculations that. You may need to undertake particular if you’re comparing and contrasting the the performance and position of different brands or products what is it well market share is almost always.
Expressed as a percentage it’s the percentage share of the overall market or market segment that is held by a. Product by a brand or even by a business now the key thing to remember about market share is they can be calculated based on the different numbers so for example.
You might be looking at the overall sales or revenues of the market in total and basing the calculations on that but you can. Also look at the volume or the amount of products. That are produced or sold in the market that’s also a very important way of calculating market share let’s just look at a couple of examples to. Illustrate what we mean by this percentage firstly let’s think. About the global market for the shipment of personal computers who do you think of the largest players in this market who has the largest market share well the market has changed dramatically over recent. Years and now the largest manufacturer and seller of pcs globally is.
Lenovo a Chinese base verb who have 20 percent of the global market in 2015 and when you look at the remaining of the other leading players in the market. You can see how their market share is lower than Lenovo HP almost as large at 18 percent of the market Dell at 14 and then three manufacturers of personal computers Asus Apple and Acer.
Have 7 percent of the global market each let’s take a look at one more example and you’ll see different. Types of market share information here so here we’re looking at the global market force known as carbonated drinks cans of coke and pepsi who you think has a largest market share I.
Bet most of you would guess that it’s Coca Cola in fact they have a whole range of different brands don’t they but in total they have just under half or 49. Percent of the total volumes shipped in carbonated drinks globally 5 out of 10 our Coca Cola or coca-cola brands Pepsi has a market share significantly lower than coca-cola globally at 20 percent which. Means together the two of them account for about 70% of the global market which means that the rest the likes of dr. pepper and others are fighting for their share which is. 34 31% and but that by the way is the.
Data for 2015 that the billions of Units in 2015 now when you get some information on markets and market size if you’re required to calculate market share what you need to be. Looking for is what is the total value of the market so so for example you’ve got a table like this and you are asked. To calculate market share the first thing you need to do is to calculate the total size. Of the market before you start to do any calculations so if we have. Five businesses here a B C D and E they each have separate sales ranging from. What’s the lowest 175 company D up to 900,000 for business C what we have to do is add.
All those five businesses sales together if you add them together it comes to two million pounds this year. That is the size of the market if you’ve got that information what you can then.
Do is calculate the market share of each of those five businesses compared with. The total market size of 2 million so the calculation for market share is the business sales or the product sales compared with the overall market sales expressed as a percentage. Let’s have a look therefore for comfort a it had sales of 250,000 we know that the total market. Size is 2 million 250,000 divided by 2 million expressed as a percentage is 12.5% company a has 12.5% share. Of the market in that particular period and so what you can then do is do the same. Calculation for the other businesses we’ve done company or business a we know that the largest company or business is business C with.
Sales of nine hundred thousand nine hundred thousand divided by the total market sales of two million is a market share of 45 percent hopefully. You’ll be able to work out those numbers using the technique we’ve provided there don’t forget that market share is just one calculation of market analysis but it’s a very important one and subsequent videos.
We’ll take a look at how market share is a very good. Indicator of the competitive strength of a business and what strategies businesses might have to try to improve their market share but. For now that’s the end of this short video on how to calculate market share.