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A share development index of 40 means that the business or product has only obtained 40 percent of its share potential.

a)True
b)False

1 Answer

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Final answer:

The claim that a share development index of 40 indicates only 40 percent of share potential is achieved is false, as share development can depend on various factors and market definitions.

Step-by-step explanation:

The statement that a share development index of 40 means that the business or product has only obtained 40 percent of its share potential is false. This is because the share development index is a measure that can be influenced by various factors and won't necessarily equate to a straightforward percentage of share potential realized. For example, defining market boundaries and understanding competition can significantly affect how we interpret market share numbers. Furthermore, market share can be expressed in terms of units sold, revenue, or as a percentage of the overall market, which can differ from the notion of 'share potential'. Various examples include large companies like Microsoft, which had a dominant share in specific sectors but smaller shares in the broader market, or businesses like DeBeers with a monopoly in diamonds but a smaller share of the total market for precious gemstones and even smaller in the market for jewelry.

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