Does Market Share Still Matter?

The article explores the relationship between market share and profitability in the context of digital transformation. Traditionally, larger market shares have been associated with higher profitability due to efficiency gains, market power, and perceived quality. However, the digital transformation has disrupted this relationship. While digital capabilities can increase efficiency for companies with large market shares, they also level the playing field for smaller companies, allowing them to compete head-to-head with market leaders. The study found that as companies become more digitalized, the link between market share and profitability weakens, and smaller firms can achieve greater relative profitability gains. Therefore, the article suggests that companies should prioritize digital transformation to boost profitability, especially for smaller firms. [Extracted from the article]