ABSTRACT
THE pursuit of market share for profit is hotly deVbated. At the heart of the debate lies the relationV ship between market share and profitability (Wind and Mahajan 1981). Evidence shows a 10-point increase in share of market is associated, on the average, with a five-point increase in return on investment (Buzzell, Gale, and Sultan 1975). Yet, the exceptions to the rule are convincing (Hamermesh, Anderson, and HarV ris 1978; Jacobson and Aaker 1985; Woo and Cooper 1982). Adding heat to the debate is the prospect that profitability is a random walk among market shares (Caves, Gale, and Porter 1977; Mancke 1974; Rumelt and Wensley 1981). A resolution seems to require placing a price tag on the value of a change in market share and evaluating the corresponding return on inV vestment (Henderson 1979).
