Market size, share & growth

• what is market size?

  total sales of all businesses in the market
• what is value of a market?

  selling price x number of units sold
• what is volume of a market?

  number of units sold
• what is market share?

  a businesses sales as a % of total market sales
• equation for market share

  sales of a business/total market shares x 100
• what is market growth?

  change in the size of the market over time
• what is the market growth equation

  change/original x100
• how can market size help a business

  • indicates potential sales volume/revenue
  • helps businesses to decide on best strategy
• how can market share help a business?

  • indicates how the overall market is split between existing competitors
  • indicator of a businesses competitive position
  • bigger market share = more power
• how is market share calculated?

  by value but can be volume
• how does market growth help a business?

  • can show if the market is rising, declining or stable
  • much easier to grow sales in a growing market
  • shows threats of new entrants
• how can market growth be calculated?

  by either value or volume