Industry competitiveness: leadership identity and market shares

Abstract

Industry competitiveness is analysed by considering the stability of leadership positions across industries over time. Unlike earlier studies of competition which have concentrated solely on market shares the paper begins by establishing the significance of both the changes in market shares and the identity of market leaders in reflecting industry competitiveness. To do this, the identity, and market shares, of industry leaders is mapped out, across 11 years and 32 industries in India. It was found that market leaders are very stable in 12 industries but are relatively less stable in 20 industries. When they are stable, market shares are an adequate reflection of competitiveness but when they are not, leadership identity also becomes significant. A dummy variable of proxy for leadership stability is then constructed. Modelling leadership stability using this proxy, it was found that industry profitability, economies of scale and industry growth are all significant determinants.