Explain and evaluate the widespresd use of market share as a key market performance metric Free Essay, Term Paper and Book Report
The majority of managers identified market share as a key performance metric to measure how well they were doing relative to their competitors. If a firm gains a higher market share, sales should increase leading to higher profits. Intuitively, this positive link between a companys share and its profitability seems to be obvious. The empirical evidence of this "law of marketplace" were found by Buzzell, Gale and Sultan (1975) in their PIMS (Profit Impact of Market Strategy) studies. Their findings published in the article
Market share a key to profitability became acknowledged in the business world, but also opened the door for criticism. This essay will explain why market share can be profitable and evaluate its widespread use as a performance metric.
Increasing market share is accompanied by increasing popularity of the brand, the total number of customers and their loyalty. These customers are prepared to pay higher prices because market share leaders tend to offer higher-quality products (Buzzell et al, 1974). Another benefit of a large share is found in relative adva......
Word Count: 1201
Page Count: 4.8 (250 words a page / double spaced)
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