An appliance company made $2 billion worth of revenue on coffee machines this year. The total market for coffee machines is $18 billion. What is the company's market share? Round to the nearest tenth of a percent.
Answer (2)
Calculate the market share by dividing the company's revenue by the total market size: 18 2 = 9 1 .
Convert the market share to a percentage by multiplying by 100: 9 1 × 100 = 11.111... .
Round the percentage to the nearest tenth: 11.1% .
The company's market share is 11.1 % .
Explanation
Understanding the Problem We are given that an appliance company made $2 billion in revenue from coffee machines this year, and the total market for coffee machines is $18 billion. We want to find the company's market share as a percentage, rounded to the nearest tenth of a percent.
Calculating Market Share To find the market share, we divide the company's revenue by the total market size. This gives us the fraction of the market that the company controls.
Converting to Percentage and Rounding The market share is calculated as follows: Market Share = Total Market Size Company Revenue = 18 2 = 9 1 To express this as a percentage, we multiply by 100: Market Share Percentage = 9 1 × 100 = 11.111... Rounding to the nearest tenth of a percent, we get 11.1% .
Final Answer Therefore, the company's market share is approximately 11.1% .
Examples
Understanding market share is crucial in business. For instance, if you're analyzing the beverage market and a company has a 25% market share, it means they sell a quarter of all beverages sold. This helps in assessing the company's competitive position and potential for growth. Knowing market share can guide investment decisions, strategic planning, and performance evaluation in various industries.
The company's market share is calculated by dividing its revenue of $2 billion by the total market size of $18 billion, which results in approximately 11.1%. This percentage reflects the company's portion of the market for coffee machines. Thus, the company holds an 11.1% market share in the coffee machine market.
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