Relative Market Share Is

question 37

Multiple Choice

Relative market share is:

• A) calculated by dividing a company's percentage share of total industry sales volume by the percentage share held by its largest rival.
• B) calculated by adjusting a company's revenue share up or down by a factor proportional to whether their quality/customer service factors are above/below industry averages.
• C) calculated by dividing a company's market share (based on dollar volume)by the industry-average market share.
• D) particularly useful in identifying cash cows and cash hogs.Cash cow businesses have big relative market shares (above 1.0),while cash hog businesses have low relative market shares (below 0.5).
• E) calculated by subtracting the industry-average market share (based on revenue)from the company's market share to highlight relative share above/below the industry average.This amount is a better indicator of a business's competitive strength than is just looking at the firm's market share percentage.

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Definitions:

Shares Outstanding

The total number of shares of stock that are currently owned by shareholders, including share blocks held by institutional investors and restricted shares owned by company officers and insiders.

Stock Split

An action taken by a company to divide its existing shares into multiple shares to boost the liquidity of the shares, while keeping the market capitalization the same.

Market Value

The open market value at which a service or asset is available for trading.

Shares Outstanding

The total number of shares of stock that are currently owned by investors, including shares held by institutional investors and restricted shares owned by the company’s insiders.