The basic idea of market share is simple. Market share is the amount of a product or service (usually expressed as a percentage) that a business sells in a given market area. Knowing the market share a business has is useful for both investors and for businesspeople.

Most of the time a business with a large market share will have lower operating expenses and thus be more profitable than smaller competitors. Changes in market share are a valuable clue to a company’s future prospects. For example, if the management of a company sees that their market share is decreasing, this can be n indicator that their competitors are using more effective strategies to attract new business.

While the basic concept of market share is simple, it can get complicated when you want to define market share in a particular situation. The steps below tell you how to define market share for different scenarios.

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A stock market / share market is a public market (a loose network of economic transactions not a physical facility or discrete entity) for the trading of company stock and derivatives at an agreed price; these are securities listed on a stock exchange as well as those only traded privately.

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