A company’s market share is the percentage of total revenues in an industry that it generates. Market share is measured by dividing the company’s sales during a certain time period by the industry’s total sales over the same time period. This statistic is used to get a sense of a company’s size in comparison to its market and rivals. The firm having the greatest market share in a certain industry is the market leader.
Market share is a measure of the consumers’ preference for a product over other similar products. A higher market share usually means greater sales, lesser effort to sell more and a strong barrier to entry for other competitors.
When a company is producing product they consider a segment of people buying that particular product. Company also looks for that Is that product available in market before they launched their product and what is their product quality , review and market share of other company product. So the company assess the situation and launch the product and try to get maximum share in the market of that particular type of product.
For example:- Mahindra is leader in SUV making in India. If other company want to sell their SUV in India for that it has to beat the Mahindra SUV in feature and product quality and increase their presence in market and slowly increase their market share.