How To Find New Growth Avenues in Market Share in 5 Steps

By Indeed Editorial Team

Published March 17, 2022

The Indeed Editorial Team comprises a diverse and talented team of writers, researchers and subject matter experts equipped with Indeed's data and insights to deliver useful tips to help guide your career journey.

Market share is the percentage of the industry profits a single company holds. It's an important metric for understanding how successful a company is and how much competition it may have. If you're a business or financial professional, learning more about how to find new growth avenues in market share can be beneficial. In this article, we explain what market share is, detail how to calculate it, describe the steps you can take to find new growth avenues in market share and provide helpful tips.

Related: How To Calculate Market Share (With Examples)

What is market share?

Market share is the amount of the total industry profits a single organization or company holds. When a company has more of the profits, they have a high market share, and when a business has less of the total profits, they have a low market share. When a company considers entering a new field or industry, it may consider the current organizations within it and their market shares. Calculations for market share usually consider specific regions, as the makeup of market share can fluctuate depending on the specific market. These are some benefits of having a substantial market share:

  • Growth in revenue: Many companies have goals related to profits and revenue, and by increasing market share, organizations can often increase their earnings as well. When companies increase their revenue, it may be simpler to earn investors.

  • Decrease competition: When a company has a higher market share, it may decrease the level of competition from other brands and businesses. This is because more of the resources and profits go to one company, allowing it to grow further.

  • Improve marketing: With more resources from profits, companies can invest more into marketing and advertising, which can help them increase brand awareness and exposure. This can create a cycle of growth for the business.

  • Scale operations: A company with a high market share in one country may choose to scale its operation to other countries. For example, if a company has a market share of 50% in the United States, they may consider selling products in Canada as well.

Related: What Is Share of Market? Definition, Types and How To Increase

How to calculate market share

These are some steps you can follow to calculate market share:

  1. Choose a fiscal period to assess: The first step to determining a business' market share is choosing a period to use in your assessment. This may be a fiscal quarter or a fiscal year, depending on your parameters.

  2. Determine the total company sales: Calculate the total sales that the business had in the selected period. If the company operates in several markets, you calculate it separately for each.

  3. Calculate sales for the industry: To calculate the sales for the total market, you can use research reports and industry associations. You can combine businesses and retailers within one company to determine the total market share.

  4. Divide total sales by industry sales: The last step is to find the market share by dividing the total company sales by the total market or industry sales. The division process produces a decimal you can make into a percentage by multiplying by 100.

Related: How To Do Market Analysis (With Steps and Tips)

How to find new growth avenues in market share

These are some steps you can follow to find new growth avenues in market share:

1. Analyze the market share details

The first step to finding new growth avenues in market share is assessing your current market share details. This can include understanding general overviews of the market and identifying the leaders and key companies. You can benchmark your market share compared to other businesses in the field and measure your growth against theirs.

2. Focus on solving customer problems

One option for increasing your market share is focusing on innovation. Consider identifying customer problems that currently have no solutions and develop products and services to address them. This may include altering your current goods or designing new additions to your current offerings.

Related: What Is Market Penetration Strategy?: Definition and Types

3. Find new demographics for products

If you choose to focus on solving customer problems, you can also identify new demographics for those solutions. For example, a food retailer may choose to stock vegan and all-natural options in its locations to compete with other stores. This may require them to target a new demographic in marketing strategies.

4. Improve brand marketing methods

You can improve marketing methods to appeal to new demographics and your current customers. Consider analyzing trends and implementing social media marketing to reach more customers. Create advertising content that resonates with potential customers by including specifics about the problems your product can solve.

5. Assess strategies and adjust for growth

To ensure your strategy for market growth performs well, you can assess the details in the first step quarterly. Consider your growth compared to other businesses in the industry and make adjustments to your approach. For example, if you introduce new products but don't notice an increase in sales, you may focus on finding the demographic for those products.

Related: What Is Total Addressable Market? Definition and 3 Calculation Methods

Tips for increasing market share

These are some tips for increasing market share:

  • Focus on customer retention: Though it's important to find new customers, it's also important to focus on maintaining your current followers and fans. Consider providing quality customer service and customer attention to retain current consumers.

  • Study competitors' methods: By studying your competitor's methods for growth, you can learn more about the best ways to appeal to the market. For example, if a competitor offers installment payment plans, you may make the shift to offering them as well.

  • Consider acquiring companies: Depending on the size of the organization you work for, acquiring new companies may be an option for increasing market share. For example, one social media platform may acquire another to increase its share of the industry.

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