Market share represents the percentage of total sales that a company has within a specific industry. It is an indicator of a firm’s competitiveness in the market. The formula to calculate market share is

Market Share Percentage =\(\frac{Firm's \,Sales}{Total \,Sales\, in\, the \,Market}\)×100

• By Volume: This type of market share measures the number of goods bought by customers, providing a quantitative measure of the units sold by businesses. Example: the number of bags of maize sold by a farm.
• By Value: This measures the amount spent by customers on the total number of goods sold by businesses. It represents the total revenue expressed in monetary terms, such as Kenyan shillings (KSh), US dollars (US$), or Indian rupees.

Consider a company, PQR Electronics, that sold €8 million worth of computers in Sweden. During the same period, the total market sales were €100 million. Using the market share formula, the market share of PQR Electronics would be:

 Market Share Percentage =\(\frac{€8million}{€100million}\)×100 = 8

This means that PQR Electronics holds an 8% market share in the computer industry in Sweden.