The ratio of the sales revenue of the firm to the total sales revenue of all firms in the industry, including the firm itself, is known as?


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Shane Richardson Profile
The ratio of sales revenue of the firm to the total sales revenue of all companies in the industry is called the market share.

According to the market share can be defined as:

  • "The portion or percentage of sales of a particular product or service in a given region that are controlled by a company"
In most industries, there will be a run-away leader who receives the most custom and also has the biggest capabilities to deliver in mass volumes. This business would be classed as having the largest market share.

The market share is something all businesses study closely. The best and most accurate way to see how well you are doing is to directly compare your sale figures with a competitor. Due to you being in the same industry and more than likely selling very similar products or services, it is a fair way of understanding if you are doing better or worse than your rival.

Apple and Microsoft for example, have the biggest market share of the computing industry as they are huge players who make billions a year; something many of their competitors could only dream of.

If your company owns the biggest market share, it is an indication that you are providing the best service or the most appealing prices to the customer. As the customer has the choice of where they choose to spend their money so if they all head to one company, it indicates the power and the large market share you possess.

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