What Is Market Share?

Market share refers to that portion of the total market that is controlled by a particular entity. E.g. If Acme Corporation manufactures a product X in the Chemicals market. There are ten other companies making ten other products. The total sales of all these products put together are $ 100 million. The sales of X are $ 10 million, then it is said that Acme Corporation has 10 percent market share.

But real world business is not as simple as this; market share could also refer to the sales in a particular geographic area. It could also refer to a particular distribution channel. E.g. market share in the original equipment manufacture channel. In most markets companies will have more than one product. In such cases market share will be denoted in terms of target segments. E.g. high-end segment, middle segment, lower end segment etc. Companies are constantly thinking of ways to increase their share in the market.

Share market is also known as the stock market. It is a market where ordinary people could buy and sell shares and other types of  securities such as warrants, options  from companies listed in the share market. Well known stock markets in the world are New York, London and  Tokyo Stock Exchanges. As companies need funds for investment or further expansion they will issue shares and sell the shares of itself via the share market to investors; investors could buy or sell shares through the stockbrokers. The price of the shares will fluctuate depending on the demand and supply. In a healthy growing market, the share prices will normally move up, this is called a bull market, whereas if sentiment is bad, prices go down, then it is called a bear market.