Market share absolute, relative
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IGC-DEFINITION
Market share absolute, relative
The market share is the relationship of the sales volume of a business or of a product to the volume of the relevant market in one year. In the absence of market volume statistics market share is often calculated based on sales.
The relative market share compares a business’s own turnover or sales volume in a given period with its biggest competitors in this market. Depending on which comparisons are made, different ratios result – as the following example shows:
The sales of A compared to its biggest competitor (B) result in a relative market share of 2.08 (250 : 120) or 208 %. If A is compared to the three biggest competitors (B, C, D) the relative market share is 1.00 or 100 %. Compared with the four biggest market participants (A-D), A’s relative market share is only 50 %.
If it is difficult to obtain market data, the business can still estimate its market position with the aid of the relative market share, as long as the sales figures of its biggest competitors are known.
from: IGC-Controller-Wörterbuch, International Group of Controlling (Hrsg.)
