Market Share

Examples of Market Share in the following topics:

• Market Share

  • If company A sold 600 of those baubles, they have 60% of the market share.
  • Market share is a key indicator of market competitiveness—that is, how well a firm is doing in terms of its competition.
  • Firms with market shares below a certain level may not be viable.
  • Increasing market share is one of the most important objectives of business.
  • However, increasing market share may be dangerous for makers of fungible hazardous products, particularly products sold into the United States market, where they may be subject to market share liability.

• Calculating Market Share

  • Unit market share (%) = 100 * Unit sales(#) / Total Market Unit Sales(#)
  • Unit sales (#) = Unit market share (%) * Total Market Unit Sales (#) / 100
  • -- Revenue market share: Revenue market share differs from unit market share in that it reflects the prices at which goods are sold.
  • In fact, a relatively simple way to calculate relative price is to divide revenue market share by unit market share.
  • However, market share is not a perfect proxy of market dominance.

• Market Share

  • Market share is key metric that helps firms evaluate demand in their market and can be influenced by PR and marketing campaigns.
  • Increasing market share is one of the most important objectives of business.
  • Firms with market shares below a certain level may not be viable.
  • Competitors often try to gain market share by reducing their prices.
  • Discuss how companies use market share as a key indicator and tool to increase market competitiveness

• Market Share/Sales

  • Increasing market share is one of the most important objectives of business and pricing may offer a mechanism to increase share.
  • Market share is a key indicator of market competitiveness—that is, how well a firm is doing compared to its competitors.
  • Firms with market shares below a certain level may not be viable.
  • Marketers need to be able to translate sales targets into market share because this will determine whether forecasts should be attained by growing with the market or by capturing share from competitors.
  • Increasing market share is one of the most important objectives of business.

• Estimating the Addressable Market

  • Few organizations track market share even though it is an important metric.
  • Though absolute sales might grow in an expanding market, a firm's share of the market can decrease which would bode ill for future sales when the market starts to drop.
  • Where such market share is tracked, there may be a number of aspects that will be followed:
  • Including competition and distribution issues then frames the strategy within realistic boundaries and allows a company to gauge served market share (SAM), the percentage of the market that is already being served, either by that company or all providers.
  • The folio plot visualizes the relative market share of a portfolio of products versus the growth of their market.

• Seasoned Equity Offering

  • In an SEO, a company already has shares outstanding that are trading on the market, and then decides to sell more securities.
  • When more shares are put into the market, the percent of total ownership that share represents drops.
  • Since the market price of the existing shares should adjust when new shares are issued, an SEO theoretically does not increase the value of the firm .
  • A SEO is the increase of the number of shares outstanding in the market in which the IPO took place, the primary market.
  • A secondary market offering broadly means that shares are sold, but not by the company through the registration of new shares.

• Performance per Share

  • Price to Earnings (P/E) ratio relates market price to earnings per share.
  • P/E Ratio = Market Price Per Share / Annual Earnings Per Share .
  • The dividend yield or the dividend-price ratio of a share is the company's total annual dividend payments divided by its market capitalization—or the dividend per share, divided by the price per share.
  • Market To Book ratio is used to compare a company's current market price to its book value.
  • In the first method, the company's market capitalization can be divided by the company's total book value from its balance sheet (Market Capitalization / Total Book Value).

• Stock Splits

  • A stock split increases the number of shares outstanding without changing the market value of the firm.
  • The company may want to increase this number to 2,000 shares without issuing new shares.
  • Since the market value of the company remains the same, the price of the new shares adjusts to reflect the new number of outstanding shares.
  • For example, a company that has 100,000 shares outstanding that trade at $6 has a market capitalization of $600,000.
  • After a 3-for-1 stock split the market capitalization of the company remains unchanged at $600,000, but there are not 300,000 shares trading at $2.

• Repurchasing Shares

  • In a share repurchase, the issuing company purchases its own publicly traded shares, thus reducing the number of shares outstanding.
  • When a company repurchases its own shares, it reduces the number of shares held by the public.
  • Repurchasing shares will lead to a corresponding increase in price of the shares still outstanding.
  • The market capitalization of the company is unchanged, meaning that a reduction in the number of shares outstanding must be accompanied by an increase in stock price.
  • Open Market: The firm buys its stock on the open market from shareholders when the price is favorable.

• Types of Financial Markets

  • Examples of financial markets include capital markets, derivative markets, money markets, and currency markets.
  • There are many different ways to divide and classify financial markets: for example, into general markets and specialized markets, capital markets and money markets, and primary and secondary markets.
  • Stock markets and bond markets are two types of capital markets that provide financing through the issuing of shares of stock and the issuing of bonds, respectively.
  • A key division within the capital markets is between the primary markets and secondary markets.
  • While capital markets and money markets constitute the narrower definition of financial markets, other markets are often included in the more general sense of the word.