It is widely recognized that one of the main factors of business profitability is market share.
Companies with market shares in excess of 40% have twice the profitability of those with only a 10% market share and it is estimated that for every 10% increase in market share, the return on investment rises by 5%.
As market share is a measure of consumers’ or businesses’ preference for one product over other similar products, a higher market share usually means greater sales, less effort needed to sell more and a strong barrier of entry for other competitors.
And because market share provides a vital indication of market competitiveness, it also enables business executives to identify key trends in consumer behavior, to review total market growth or decline and realize both their market opportunity and market potential.