Many firms use market share to set marketing goals and monitor performance. Recent meta-analytic research reveals the average economic impact of market share performance and identifies some factors affecting its value. However, empirical understanding of why any market share-profit relationship exists and varies is limited. We simultaneously examine the three primary theoretical mechanisms linking firm market share with profit. On average, we find most of the variance in market share’s positive effect on firm profit is explained by market power and quality signaling, with little support for operating efficiency as a mechanism. We find a similar explanatory role of the three mechanisms in conditions where market share negatively predicts profit (for niche firms and those “buying” market share). Using these mechanism insights, we show the value of market share differs in predictable ways between firms and across industries, providing new understanding of when managers may usefully set market share goals. We also provide new insights into how market share should be measured for goal setting and performance monitoring. We show that revenue market share is a predictor of firm profit while unit market share is not, and that relative measures of revenue market share can provide greater predictive power.

许多公司使用市场份额来设定营销目标和监控绩效。最近的元分析研究揭示了市场份额表现的平均经济影响，并确定了影响其价值的一些因素。然而，对为什么任何市场份额-利润关系存在和变化的经验理解是有限的。我们同时考察了将企业市场份额与利润联系起来的三个主要理论机制。平均而言，我们发现市场份额对公司利润的积极影响的大部分差异是由市场力量和质量信号来解释的，而对运营效率这一机制的支持很少。我们发现这三种机制在市场份额负面预测利润的情况下具有类似的解释作用（对于利基公司和那些“购买”市场份额的公司）。使用这些机制见解，我们展示了市场份额的价值在公司之间和跨行业之间以可预测的方式不同，为管理者何时可以有效地设定市场份额目标提供新的理解。我们还提供了有关如何衡量市场份额以实现目标设定和绩效监控的新见解。我们表明，收入市场份额是公司利润的预测指标，而单位市场份额则不是，并且收入市场份额的相关度量可以提供更大的预测能力。