Question

Keeping Score: Financial Analysis and Performance Metrics - Understanding Market Share. How do you do this? I have been trying for several hours.

What is Market Share? Most simply, market share is the proportion of total market sales attributed to a single company or product. It is the total sales of a single company's product divided by the total sales of the same product for all firms in that market. A single firm's market share is expressed as a percent of this later total. For example, if the total sales for all craft beers in the Dallas-Ft. Worth market area were $10,000,000 in 2014 and the total sales for a single brewer (say, Revolver) were $500,000, then Revolver's market share in 2014 was $500,000/$10,000,000 ,05, or 5%. There are a number of ways to view market share. The view just discussed is the simplest way to look at market share and is termed absolute market share in which a single firm's sales are compared to the absolute sales of the industry as a whole. Absolute market share can be computed in two ways: 1) based on unit sales, unit market share; and 2) based on revenue, revenue market share Company Unit Sales Total Market Unit Sales Unit Market Share %- 100 Comipauy Sales Reveue (dollars) Total Market Sales Revenue (dollars) Revenue Market Share - 100 By contrast, marketing managers also are interested in measuring their relative market shares compared to specific competitors, usually the largest competitor in the relevant market. Relative market share is the Firm's sales expressed as a ratio with the sales of these competitors: Relative Market Share (%) = Company Market Share Competitor's Market Share e100 For example, above we noted that Revolver's sales for 2014 were $500,000 and it commanded 5% of the total craft beer market in the DFW market area. Assume that Revolver has three other primary competitors in this market area: Rahr and Sons, Deep Elum Brewing Company, and Petticola's Brewing Company. Assume the market shares held by these three brewers are 10%, 7%, and 6.5%, respectively. Revolver's relative market shares compared to these three brewers are Against Rahr and Sons: 5%/10%-,5 or 50% Against Deep Elum: 5%/7% = .71 or 71% Against Petticola: 596/6.596-.76 or 76%

Answer 1

1. Shannon's absolute unit market share in barrels sold=

Shannon's barrels/Total barrels sold in the market

3566/194472=

1.83%

2.Shannon's unit market share in gallons sold=

Shannon's gallons/Total gallons sold in the market

(3637*31)/6028632=

1.87

3. Shannon's absolute barrels-market share

3597/194472=

1.85%

Largest competitor--Rahr & son's absolute barrels-market share

38894/194472=

20.00%

Shannon's Relative market share to Rahr's =

1.85%/20%=

9.25%