Question

What is the importance of knowing how to compute the market share in a business​

Answer 1

Knowing your customer is key for any business endeavor. Successful business owners understand what their customers want and the most effective way of making their product or service available. The depth of knowledge is also crucial it requires knowing more than their names, ages and incomes. As a business owner, knowing your customers hobbies, tastes and interests along with what they watch, listen to and read can be a profitable advantage.


Hope this helps ^v^

Answer 2

Simply put, market share is a key indicator of a company's competitiveness. When a company increases its market share, this can improve its profitability. This is because as companies increase in size, they too can scale, therefore offering lower prices and limiting their competitors' growth.

You can determine a company's market share by dividing its total sales or revenues by the industry's total sales over a fiscal period.
It's important to calculate and understand market size for several reasons. First, entrepreneurs and organizations can use market sizing to estimate how much profit they could potentially earn from a new business, product or service. This helps decision-makers to decide whether they should invest in it.