market share is a turn you off in here in business but what is market share market share is an important metric for businesses to understand because it gives them an idea of how they're performing in the market relative to their competitors a company's market share is a measure of its sales compared to the total sales in the whole of that market by knowing its market share a company can assess its position in the market identify areas for growth and make informed decisions about the future of the business let's take a look an example from the UK Supermarket sector in 2022 the total revenue for the UK Supermarket sector was 163.6 billion pounds and this was split in the following way Tesco had revenue of 56.9 billion Sainsbury's 33.1 billion Asda 22.9 billion Morrisons 17.7 billion and Aldi 11.3 billion other supermarkets such as Lidl waitrose and ocado accounted for 21.6 billion in Revenue bringing that total to 163.6 billion we can now use that information to help us calculate the individual market share for one of those supermarkets to calculate market share you need to divide the individual supermarket's Revenue by the revenue of the whole sector and then times that by 100. this will give you the market share for that individual Supermarket as a percentage so let's use that formula to calculate the market share for Tesco Tesco's Revenue was 56.9 billion pounds divide that by the total revenue for the whole sector which is 163.6 billion that gives us a figure of 0.347 times that by 100 and you get 34.7 percent meaning that of all the supermarkets in the UK 10 Tesco accounts for 34.7 percent of the revenue in that whole sector making it the market leader market share is a useful indicator to companies such as Tesco as it's easy to measure and a company can see whether their market share is increasing or decreasing year on year it also allows businesses such as Tesco to assess their position in the market by comparing their market share to others in that industry for example if Tesco found that their market share was much lower than others in the industry then they may consider adjusting the strategy such as investing in your product lines investing in more advertising and expanding its presence into new geographic regions on the other hand if Tesco sees that its market share is consistently higher than others in that industry then it may continue to grow using the same strategies as used previously as their market share clearly indicates that what they're doing is working