Relative market share can be calculated in terms of revenues or market share. It is calculated by dividing your own brand’s market share (revenues) by the market share (or revenues) of your largest competitor in that industry.
How do you calculate relative market share?
Relative market share is calculated by subtracting a company’s market share from 100 to find the percentage it does not control. If Company Z controls 30% of its market, this means it does not control 70%. From there, the company’s market share is divided by the percentage of the market it does not control.
What is market share in BCG matrix?
Structure of the BCG Matrix
The matrix is a 2 x 2 quadrant a column heading Market Share and row heading Market Growth Rate. Market share compares the SBUs sales in the current year versus those of competitors. The market growth rate is this years industry sales minus the past years industry sales.
What is the difference between market share and relative market share in the BCG matrix?
Relative market share offers a way to benchmark a firm’s or a brand’s share against that of its largest competitor, enabling managers to compare relative market positions across different product markets. … In the BCG matrix, one axis represents relative market share––a surrogate for competitive strength.
What is a good relative market share?
The purpose of the “relative market share metric” is to access a firm’s or a brand’s success and its position in the market. A firm with a market share of 25% would be a powerful leader in many markets but a distant “number two” in others.
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.
What does market growth rate mean?
The rate at which a market’s size is increasing. This is usually expressed as a percentage per annum. The market growth rate is a key factor to be considered when calculating the development of a specific product in a particular market. …
Is BCG matrix still relevant?
The matrix remains relevant today—but with some important tweaks. A Changing Business Environment Since the introduction of the matrix, conglomerates have become less common and the business environment has become more dynamic and unpredictable. Market share is now less of a driver of and surrogate for advantage.
How do you calculate a company’s market share?
How to Calculate Market Share
- Unit Market Share = (Total number of units sold by company/Total number of units sold in the industry) x 100.
- Revenue Market Share = (Value of company’s total sales/Value of total market) x 100.
- Calculation Process.
- How to define the Market?
- Facts and Factors.
- In the end.