Title: Market share increase: What happens to productivity and profitability?

Authors: Zoltan Szegedi, Erik Korom

Addresses: Department of Operations Management, St. Istvan University, 2103 Godollo, Pater Karoly u. 1, Hungary. ' Department of Accountancy, Budapest Business School, 1149 Budapest, Buzogany u. 10-12, Hungary

Abstract: The bankruptcy of a fast-growing logistics provider claiming to have a remarkable market share can seriously shock the customers and the business community. On choosing the next provider, its former customers will pay more attention to company size, growth and corporate performance indicators. Do these measures affect one another and, if yes, to what extent? Is there a direct or an inverse effect? And, over all: What is the |measure of competition| in the logistics service sector? We also examined the issue widely discussed in the related literature of whether higher productivity leads to lower costs resulting in a bigger market share, or perhaps it is just the other way round? Based on the calculations with the 2001-2006 figures of companies belonging to the logistics service related sectors, we could prove that productivity will/can be increased by raising market share, but on the other hand, market share cannot be enhanced through increased productivity.

Keywords: competitiveness; logistics; regression analysis; profitability; productivity; firm size; firm growth; corporate performance indicators; market share.

DOI: 10.1504/IJPM.2010.029776

International Journal of Procurement Management, 2010 Vol.3 No.1, pp.72 - 90

Published online: 02 Dec 2009 *

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