Market share: the conduit to future success?

Market share is often used to describe the position and success of a firm in an industrial sector. While the impact of market share is not always reflected in a firm’s profitability or performance, many firms see it as an important organisational goal. Accordingly, it could be argued that market share influences the organisational thinking and strategic planning of small- to medium-sized enterprises. However, it is unclear how and to what extent? The analysis indicates that firms with an increased market share differ significantly from firms with a decreased or static market share on the emphasis given to a number of environmental factors. The analysis shows that firms with increased market share are likely to have higher performance and in particular achieve enhanced financial performance, greater customer retention and customer satisfaction. This applies to all firm sizes. To ensure competitive advantage, firms need to consider market share in conjunction with overall profits.