What is Relative Market Share?
Relative market share is a company’s market share divided by the market share of its largest competitor. Unlike absolute market share, it shows competitive strength rather than raw size. A value above 1 means the business leads its market, while a value below 1 means it trails the leader.
How It Works
- Calculate your own market share as your sales divided by total market sales.
- Calculate the largest competitor’s market share the same way.
- Divide your share by the competitor’s share to get the relative figure.
- Use it in tools like the BCG matrix to classify products as Stars, Cash Cows, Question Marks or Dogs.
Saudi Context
Saudi conglomerates use relative market share when benchmarking subsidiaries against regional leaders such as Almarai in dairy or stc in telecom to decide where to invest or divest.
Example
If your company has 20 percent market share and the leader has 40 percent, your relative market share is 0.5, meaning you are half the size of the leader.