1. To gain the market share of competitors, you can ignore too small competitors.
2. Square market share.
3. Add up these square values.
Herfindal-Hirschman index is expressed by the sum of squares of market shares of all enterprises in a specific market, and its formula is:
hhi=\sum_{i= 1}^n ^2=\sum_{i= 1}^n s_i^2
Among them:
* x- the total size of the market.
* the scale of Xi-I enterprises.
* si = Xi/x- the market share of the I-th enterprise
* n- Number of enterprises in the industry.
Herfindal-Hirschman index is the square sum of the market share (molecular%) of the 50 largest enterprises (all enterprises less than 50) in a certain market. Obviously, the greater the HHI, the higher the market concentration and the higher the degree of monopoly.
The index can not only reflect the market share of large enterprises in the market, but also reflect the market structure outside large enterprises, so it can more accurately reflect the influence of large enterprises on the market.