MARKET SHARE AND

COMPETITION

Prepared by:Nikko Jean Reyes

STEM XII
• Market surveys and the calculations of market
size and value are important to find out
whether the demand for a product really exist.
• It is therefore important from the outset,to
estimate the proportion of the total market
that a new business could reasonably expect
to have.This is referred as the market share.
• It is often difficult to estimate the realistic market
share.This figure depends on a large number of
variables.
• In many cases new entrepreneurs over-estimated
that they could expect,with the result that
production operates at only a small proportion of
the planned capacity.
• These figures should not be assumed to
represent the scale of production that could be
expected. Even if no one else is currently
making a product locally,it is likely that once a
new business starts production and is seen by
others to be successful,they too will start up in
competition.
 EX.: ESTIMATES OF MARKET SHARE FOR A NEW FOOD
BUSINESS WITH DIFFERENT LEVELS OF COMPETITION

No of other products Many Few One None

Size of competitors Large Small Large Small Large Small

Product Range S D S D S D S D S D S D

Market Share(%) 0- 0-5 5- 10- 0- 5- 10- 20- 0-5 10- 30- 40- 100
2.5 10 15 2.5 10 15 30 15 50 80