MARKET SHARE IS NOT DESTINY

Inquiries into the relationship between market share and profitability have provided valuable generalizations and insights about business strategy. A case has been made for both high and low market share strategies in the pursuit of superior profitability. However, what these studies mean for business strategists in medium share companies looking to improve sub-par profitability is not so clear. What strategy should they implement? Should they, for instance, chase additional share or selectively concede share and focus their efforts on profitable segments and niches? The answers formulated to this question will have long-term strategic consequences. A number of studies have considered the statistical relationship between market share and profitability. The issue has also been looked at from the perspective of high share and low share firms. This article deals with market share profitability in terms of strategic options for top management in medium share companies.