What is the meaning of relative market share?

Relative market share compares the market share of a company with that of its next biggest rival. A company which has a relative Market share means that they are the market leader which eclipses their competitor by this factor.

What is relative market share example?

Relative market share shows how a company is faring in terms of its leading competitor. From there, the company’s market share is divided by the percentage of the market it does not control. Using our example, we’d divide 30% by 70% to arrive at a 42.8% relative market share for Company Z.

How do you find relative market share?

A company’s market share is its sales measured as a percentage of an industry’s total revenues. You can determine a company’s market share by dividing its total sales or revenues by the industry’s total sales over a fiscal period. Use this measure to get a general idea of the size of a company relative to the industry.

Can relative market share be more than 1?

And there can only ever be one brand/firm that has a relative market share greater than one. This will be the market leader only. All other brands (or firms) will have a relative market share of less than one.

Why is BCG matrix used?

The BCG growth-share matrix is a tool used internally by management to assess the current state of value of a firm’s units or product lines. The growth-share matrix aids the company in deciding which products or units to either keep, sell, or invest more in.

What is high relative market share?

Relative market share = your firm’s sale/biggest competitor’s sales. Figuring your relative market share allows you to see your success in terms of the market leader. High market share in one industry can make you the biggest player, while the same percent in another niche — lag behind.

What is the difference between raw and relative market share?

The absolute market share of a company is calculated by dividing its sales by the total sales in its market. Relative market share is calculated by dividing a company’s percentage share of the market — its absolute market share — by the percentage share of its strongest competitor.