% share problem

• May 17th 2005, 11:52 PM
mmouse
% share problem
Hi All,

I am trying to workout the the formula to show what % share of the total market you would have, if your % growth is different to the market % growth.

Example

You currently have 4% of the market.
The market grows by 10%, but you only grow by 8%.
What is your new market share?

Is it able to design a formula where you can plug in the market growth and your growth and it the result is your new market share %?

Many thanks
• May 18th 2005, 03:56 AM
ticbol
Let us say the value of the market now is M.
You have 4% of M. That means you have (0.04)M.

The M grows by 10%. So the new market is (1.10)M.
But your share only grow by 8%. So your new share is (1.08)(0.04M) = (0.0432)M

What is your new market share?
New market = (1.10)M.
What percentage of (1.10)M is your (0.0432)M?
It is
(0.0432M / 1.10M)(100%)
= (0.0432 / 1.10)(100%)
= (0.03927)(100%)
= 3.927 %

Your share of the new market is 3.927 percent only.

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A formula?

Let A = your old share, in decimals
And B = the growth of the market, in decimals
And C = your share's growth, in decimals
And D = your new share, in decimals

D = (1+C)*A / (1+B)

D*(100%) = your new share in percent.

Try that on your question above.
A = 0.04
B = 0.10
C = 0.08
D = (1+0.08)(0.04) / (1 +0.10) = (1.08*0.04) / (1.10) = 0.03927
In %, D = 0.03927 *100% = 3.927 %