Market share or Profits?

What should companies focus on Market share or Profits? An interesting article on Economic Times by Mr. VN Bhattacharya on companies aiming for sales growth at the cost of competitiveness set me thinking. We can see the euphoria of double digit has spurred many of the Indian companies to be obsessed with Market share than profits. Is it a right trend? Many of the companies we see are in a mad rush in the competition for the market share at a cost of profit. In the process companies give a skip to cost saving measures, superior processes, customer service and focus on new non - existent markets, expensive promotions, blind acquisitions etc. The latter processes definitely will result in better market share and top lines and subsequently good bottom lines in short term but the neglect in former areas tend to take its toll on the bottom line resulting in better sales and poor profits. Many companies instead of consolidating on existing customers neglect to service them efficiently and start hunting for non existent market, in the bargain end up with the flight of their loyal customers. They tend to forget the loyal customers, the ones who grew the company to the level it has attained and get on to making new customers whose loyalty to the company may be short lived. In the race for market share, some companies also end up acquiring new companies without a proper game plan as to integrating the new company with the parents, marrying organizational cultures of both, excessive manpower leading to higher costs and so on. These companies may become bigger companies but not necessarily the best. On the contrary, the companies that tend to invest in customer service, superior manufacturing processes and cost saving measures end up with better bottom lines which in turn bring them better credibility with the shareholders as well as customers, in the process win them more customers. These companies outrun their competition by becoming great companies and not necessarily bigger companies. To quote Mr. VN Bhattacharya “Being the best in the business makes the company bigger, gives it long life and puts money in the bank. Bigger is not better than greater. Being great can make you bigger and better."