In strategic management, market share refers to a proportion or a percentage of the total market that is available. The total market segment that is available is term as the market share. This total available market segment or the market is thus, serviced and catered by the companies or organizations. It can be calculated by the below mentioned methods:
(i) Company sales revenue / Total sales revenue
(ii) Company’s unit sales volume / total volume of units sold in the market
Market share is an important element that helps us in recognizing the demand of the product and, with the help of the calculated market share, company can produce products accordingly. Thus, market share is an essential area that needs a lot of attention in order to generate effective outcomes. One of the most important objective of any business is to increase the market share. If, companies work according to the percentage of the calculated market share, microenvironment variables will thus not affect the business. On the other hand, increasing market share can also be a dangerous or alarming factor for the business related with fungible hazardous products. Better market share, outcomes will be positive and the company will generate effective outcomes in future. Thus, from the very first, market share should be estimated in order to know what actually is required and how it will be catered in the market.
Walton Mendelson (2009), "Market Share, Publishamerica Inc, pg 232