Strategy · business glossary
What is Market share?
By Shivam Bhandari · Reviewed 31 October 2026 · How we write
definition
The percentage of total sales in a category or market that one business captures.
Market share explained
Market share is the percentage of total sales in a market that one company captures.
formula
Market share % = Company sales ÷ Total market sales × 100
example
Selling ₹20 crore in a ₹200 crore market gives a 10% market share.
why it matters
Higher share often brings scale advantages and bargaining power.
common mistake
Buying share with discounts that destroy profits.
Frequently asked questions
What is Market share?
The percentage of total sales in a category or market that one business captures. Market share is the percentage of total sales in a market that one company captures.
How do you calculate Market share?
Market share % = Company sales ÷ Total market sales × 100. Selling ₹20 crore in a ₹200 crore market gives a 10% market share.
Why does Market share matter?
Higher share often brings scale advantages and bargaining power.
What is a common mistake with Market share?
Buying share with discounts that destroy profits.
Related terms
Competitive advantage
Any factor that allows a business to outperform its competitors on a sustained basis.
First-mover advantage
The temporary edge gained by being the first credible entrant into a new market or category.
Diversification
Expanding into new products, markets, or business lines to reduce dependence on any single source of revenue.