2. How is "market share "calculated once the market scope has been determined?
A2:
"Market share" refers to the percentage of the total amount of goods sold or services provided in a particular market accounted for by a certain enterprise. To perform market share measurement, the relevant market has to be defined first to confirm the suppliers in the relevant market, decide a certain period of time (normally one year) and adopt the appropriate metric (such as amount, production, productivity, inventory, etc.) to figure out the scale of business of suppliers or the market. In the end, the ratio of the sales or value of sales (exports excluded) of each supplier during the certain period of time in the relevant market to the total sales of all the suppliers in the relevant market is calculated. The outcome is the market share or percentage of the market.
In other words, market share may be determined by calculating an enterprise's sales volume, monetary sales value, and other similar variables (exports shall be excluded from the calculation) as a percentage of the total sales volume and so forth, of all suppliers in a particular market. The following factors, at least, must be considered in calculating the market share occupied by a particular enterprise:
- Scope of the relevant market: determination of closely substitutable goods and services and of the geographic area and the duration of the market.
- International trade factors: export and import data.
- Market share measurement variables: in addition to sales volume and monetary sales value, other variables that may be taken into account for supplementary reference in determining market share include production volume, production value, production capacity, number of employees, operating revenue, and capitalization.
Relevant article(s) of law: Enforcement Rules of Fair Trade Act, Article 4