Relative Market Share Is

question 106

Multiple Choice

Relative market share is

• A) calculated by dividing a business's percentage share of total industry sales volume by the percentage share held by its largest rival-it is a better indicator of a business's competitive strength than is a simple percentage measure of market share.
• B) calculated by adjusting a company's dollar market share up or down in proportion to whether the company's quality and customer service 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) and cash hog businesses have low relative market shares (below 0.5).
• E) calculated by subtracting the industry-average market share (based on dollar volume) from a company's market share to determine how much a company's market share is 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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