IGCSE, A Level Business Student Forum

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.
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(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.

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.

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.