BLG 230 Study Guide - Starbucks, Second Cup

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Market share is a company"s percentage of sales in a particular industry. Market share refers to a company"s portion of sales within the entire market in which it operates. This metric indicates a company"s size within its market. The basic way of calculating this percentage is just revenue or units sold divided by that of the total market: Market share = (particular company"s sales revenue in time. Period x) / (relevant market"s total sales revenue in time period x) As the market for a good or service grows, many analysts view the maintenance or increase in market share as a sign of a company"s competitiveness. Increases in market share might come from innovation, broadening demographic appeal, lower prices, or simply advertising. Sometimes a company garners too much market share and becomes part of an oligopoly or even becomes a monopoly.

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