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What is a company's market share?

Updated: 9/18/2023
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11y ago

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"Market share" is one of those weird terms that means different things to different people.

The most basic definition is, "market share is the percentage of the market owned by a company."


If 100 frammises are sold every year and Acme sells 20 of them, Acme has a 20 percent market share.


Market share can be misleading. Let's say Acme and Ajax are the only companies that make frammises. Acme makes theirs out of cast iron, so they last forever. Ajax makes theirs from cardboard. We know there are 90-year-old Acme frammises. But you have to buy a new Ajax frammis every month because they wear out. So is it a good thing or a bad one that Ajax sells four times as many items as Acme?

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