How do you estimate expected market share?

Answer 1

It is based on Turnover, also called Revenue, or Sales.

First calculate expected turnover e.g. for the coming year.

Then consider the turnover of each of the competitors.

Each company will have only a percentage of the total 'turnover' or expected global Sales value of that particular product or product line.

If expected global annual sales of Zigtots is expected to be 10 million tishks, and Company-A expects to sell 1 million tishks worth, their market share is 10%.

But Company-B might be on target to sell 2 million tishks worth, an expected market share of 20%. If Company-A wants to increase market share they have several options some of which can be combined in the strategy e.g. reduce prices and hope for greater sales, increase marketing, increase prices whilst maintaining volume sales, focusing marketing on high-probability prospects, enhance the product (add value) so that more sales will result, and/or acquire (buy out) competitor's companies.

Increasing market share can be an important factor in sustaining and developing company growth. However, increased market share might be obtained at the cost of lowering margins and lowering profitablity, even to the extent of making losses just to increase market share. This latter position cannot be sustained indefinitely.