Market share is calculated as a company’s sales in a market segment expressed as a percentage of the total sales in that market segment. The easiest way to define a market segment is to list a company’s competitors, and use sales figures for these competitors to estimate the total sales into the market segment.
The choice and definition of the target market segment is key to obtaining meaningful market share figures. Investors monitor changes in market share, particularly in mature and stable market segments, as an indicator of a company’s competitiveness.