06 Explain limitation of using market share to compare business size.

[Mustafa Khan]

kn]this method doesnt compare how long each business has been operating in the market.
app]for example, pepsi has been operating in the market for over a few decades while cola next has been launched recently.
an]hence these 2 companies cant be compared or else it can be give inaccurate results which can mislead the investors, because of which they might experience financial loss and will eventually increase market volatility.
MODERATOR COMMENT:
KN:1/1
APP:1/1
AN:1/1

[M huzaifa jillani]

(KN)
Market share measures the percentage of total sales a business has in its market but it may not always show the true size of a business.
(APP)
For example a company could have a large market share in a smaller local market while another business with a smaller market share in a global market might actually be much larger overall.
(AN)
Therefore using only market share to compare business size can be misleading as it ignores factors like total revenue number of employees and the scale of operations in different markets.
MODERATOR COMMENT:
KN:1/1
APP:1/1
AN:0/1

[abdurrehman waseem]

KN: Market share measures a firm’s sales as a percentage of the total market.
App: A supermarket might have 10% share in a massive market while a local bakery may have 80% in a small town.
An: Comparing only by market share is misleading because it ignores the actual market size — a small share in a large market could mean higher total sales.
MODERATOR COMMENT:
KN:1/1
APP:1/1
AN:0/1

[Muaz Aamir]

KN Market share shows the percentage of total sales a business has in its market.

AP For example, if a phone company sells 20 out of every 100 phones in a country, its market share is 20%.

AN A limitation is that market share only looks at sales,so a business with a high market share might still be smaller or less successful than another that earns more money overall.
MODERATOR COMMENT:
KN:1/1
APP:0/1 How market share decrease the value /profit of business
AN:0/1(2 elements missed )

[Shaliza khawaja]

It can be difficult to calculate market share becaue the boundary is not clear for any industry for example when calculating bakerys market share, we don't know whether we should only involve fresh cakes or packaged caked AN this means comparison is unreliable, which would eventually make investors invest in the wrong company and lose there finances, due to there lack of knowledge about the bsiness leading then to take wrong decisions, which would later result in reduced trust in market data for future decisions.
Moderator comment :
KN:1/1
APP:0/1
AN:1/1

[Mamoona Hussain]

KN: When comparing the size of businesses through their market share, it is difficult to know which businesses or types of businesses should be considered (boundaries of the market)
APP: For instance, if the market share of Gucci is to be calculated then should the small scale brands that offer customised bags be included? Should the ones that manufacture medical bags be included?
AN: If yes, then the market share of Gucci will appear much lesser than without them, making it a smaller business even though it generates a much higher revenue/profit. This can be misleading for he stakeholders like investors or shareholders and they might make wrong decisions about investing Thier money which decreases chances of a higher return/rewards and limits the finance raised by Gucci which could have been used to introduce new designs of bags or to improve outlet conditions. Therefore, comparing business size through market share can give the wrong image of the actual size of the business.
MODERATOR COMMENT:
KN:1/1
APP:1/1
AN:1/1

[Mashal Umair Niazi]

KN: It does not factor in the main product/number of different products of that company
APP: A company, eg Disney would only have a small market shares in Theme Parks, wheras its main product is its Studio/Entertainment Industry.
AN: Hence although Disney is a huge company, we cannot see that using market share of Disney in ThemePark industry as it is not its main product therefore it has not invested so much into it, and it is relatively new compared to its other products, therefore has less market share - as compared to competitors solely focused on Theme Parks, who could be smaller as a buisness but have dominated the market share of that specific industry as their profit re-invested is going into one buisness instead of being spread/divided.
MODERATOR COMMENT:
KN:1/1(Try to use different key words)
APP:1/1
AN:0/1

[Abdul Hadi]

KN: Market share shows the percentage of sales a business does in an industry but does not reflect its actualpotential or size.
APP: For example a car manufacturing company like toyota may have higher market share while am EV company like revian may have less market share even though it has high growth poteneial.
AN: Older mature firms have higher market share due to their time in the industry and older performance rather than their current performance, new or small companies may have less market share but their perfamnce and growth ratio can be much higheer than older companies, Market share also ignores the companies expansion as a company might be working in other countries with higher market share value but might not be performing good in a specific company.
MODERATOR COMMENT:
KN:1/1
APP:1/1
AN:1/1

[Dania Farooq]

[KN] When calculating a companys market share, it’s often difficult to clearly define where the industry begins and ends.
[APP] For example, if a business makes laptops, it’s not always clear whether to compare its sales only with other laptop brands or also with tablets and desktop computers that serve similar purposes.
[AN] This lack of clarity can cause investors to misjudge a company’s true position in the market. Larger firms may offer safer but smaller returns, while smaller firms may bring higher profits along with greater risks. Accurately defining the industry is therefore important to make smarter investment decisions and avoid unexpected financial losses.
MODERATOR COMMENT:
KN:1/1
APP:1/1
AN:1/1

[sarah_naeem]

[KN]: A limitation of using market share to compare business size is that it only shows the percentage of sales a business does but not its actual size or potential of growth.
[APP]: For example, in a car manufacturing business product like Toyota Corolla has higher market share while an EV company like Audi has lesser market share even though it has more potential for growing rapidly in the industry.
[AN]: Thus, market share shows that older the firm higher will be the market share due to their time spent in the industry whereas newer firms have lesser market share but their growth ratio can be higher by their performance which is mainly ignored by market share, market share also ignore the companies efficiency and hard work and expansion of company, market share can also be misleading for investors which could lead to wrong decision making and investing their money in the wrong company leading to wastage of money and less or no profit gained.

[Areeba Arshad]

[KN] Market share measures the percentage of total sales a business holds within its industry.
[APP] For example, an older, well-established company may have a large market share, while a new business might still be growing its customer base.
[AN] This means market share doesn’t reflect factors like business age or growth potential. A newer firm could be smaller now but expanding quickly, so using only market share may give an unfair comparison between mature and emerging businesses.

[Mahnoor satti]

[KN] Market share does not tell us about its total success of the business in the markets.
[APP] For instance a small shoe brand might hold half of the local fashion market share however a big business may have a small share in that same area but earns much more.
[AN] Thus this give us a false picture of the 2 different business which may reslut in bad business decisions for the business futuer projects.

[Tuqwa]

kn:Market share measures the percentage of total sales a business holds in its industry but it does not always give a full picture of size.
app:Forexample an older and more established business may have a large market share because it has been operating for many years while a newer business might still be small even if it is growing quickly. Comparing them only by market share ignores factors like growth potential or innovation.
an:This means that market share can favour mature businesses and underestimate newer ones making it an incomplete measure of overall business size and performance.

[Amina Rizwan]

[KN]Market share measures the percentage of total sales a business holds in its industry but it does not always give a full picture of size.
[APP]Forexample an older and more established business may have a large market share because it has been operating for many years while a newer business might still be small even if it is growing quickly. Comparing them only by market share ignores factors like growth potential or innovation.
[An]This means that market share can favour mature businesses and underestimate newer ones making it an incomplete measure of overall business size and performance.

[Subhan Zafar]

{KN}Market share measures the percentage of total sales in a market that is controlled by one business. It can be used to compare the size of firms within the same market.
{APP}For example, Coca-Cola has a large market share in the soft drinks market, while Pepsi has a smaller one. However, if you compare Coca-Cola to a business in a completely different market, such as Apple, market share is not meaningful because they operate in different industries.
{AN}This shows that using market share is limited because it only allows comparison within the same market. It doesn’t show the overall size or value of a business across different markets or industries, so it gives an incomplete picture of business size.