Profitability and market share: a reflection on the functional relationship

Article Abstract:

A study of profitability has confirmed that a single relationship between return on investment (ROI), or profit, and market share does not exist. Some research has imposed a linear relationship between ROI and market share, but that is a poor representation of data. Empirical evidence suggests three observations on the relationship of ROI to market share. First, businesses with a small market share are not necessarily less successful than larger firms. However, in service companies and organizations in markets for raw or semi-finished materials, small businesses are just as or more profitable than larger firms. Second, some businesses seem to be stuck in the middle. Third, companies with a very large market share are less profitable, with 65% to 70% being a critical market share.

Finance, Profit, Profits, Business enterprises

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Path analysis of the relationship between market share, business-level conduct and risk

Article Abstract:

The effect of market share on three business-level risk measures is evaluated: variation in return-on-investment, instability of shares, and the difference between growth in cost and growth in price. Analysis is also included of what conduct variables might affect these relationships. The sample came from the PIMS data base, and was composed of mature industrial firms separated into three kinds of market environments. Path analysis was used, and resulted in partial support for market share risk-reduction benefits.

Analysis, Risk (Economics), Integrals, Path, Path integrals

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Technology sourcing and output of established firms in a regime of encompassing technological change

Article Abstract:

Factors involved in the patent activity of US pharmaceutical companies between 1981-91 are examined. Joint venture involvement does not increase the number of patents that a firm may have while acquisitions do.

United States, Acquisitions & mergers, Joint ventures, Patents & copyrights, Industry Overview, Economic aspects, Pharmaceutical industry, Mergers, acquisitions and divestments, Company acquisition/merger, Influence, Intellectual property, Company joint venture, Pharmaceutical biotechnology

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