Market share, profitability, and business strategy: Determinants of profitability

Most businessmen believe there is a very strong relationship between high market share and increased profitability. Indeed, this connection is supported by findings from the 3‐year‐old PIMS (Profit Impact of Market Strategy) project, a study of the determinants of profitability in the modern corporation. In a recent MSI Working Paper, Professors Robert D. Buzzell (Harvard Business School) and Bradley T. Gale (University of Massachusetts), and Dr. Ralph G. M. Sultan (Royal Bank of Canada) analyze the PIMS data to show that market share is a major determinant of business profitability. (In an earlier MSI Working Paper, “PIMS: A Breakthrough in Strategic Planning,” PIMS researchers Drs. Sidney Schoeffler, Robert Buzzell, and Donald Heany reported the major study findings and described the PIMS project's objectives, design, and background.)