U curve

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The U-curve ( English Stuck in the Middle ) describes the relationship between market share and profitability in the context of industry- related success research .


U curve (schematic)

Michael E. Porter , who has been dealing with the relationship between market success and strategy since the 1970s, found in a series of empirical studies that

  • Companies with a very small market share (“specialists”, “focus”) and
  • Companies with a very large market share ("generalists", "standardization")

have a significantly high profitability . Other competitors - with mediocre market shares - achieve low profitability. The competitors with mediocre market shares “sit between the chairs” ( stuck in the middle ): They are too small to compete with the market leaders and too big to be able to take advantage of the niche economies of the specialists. The sizes given for high profitability in relation to market share vary based on empirical findings. The range for a stuck in the middle with ten to 20 percent market share is given in several studies, while the range for specialists is in the order of magnitude of one to five percent (all specialists combined, however, not more than ten percent) and for companies with a market share of more than 40 percent, increasing profitability can be observed.


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  • Cynthia A. Montgomery; Michael E. Porter (Ed.): Strategy. Seeking and Securing Competitive Advantage . Harvard Business Press, Boston / Mass. 1991.
  • Michael E. Porter: Consumer behavior, retailer power, and manufacturer strategy in consumer goods industries . Doctoral dissertation (unpublished), Harvard 1973.
  • Michael E. Porter: Note on the structural analysis of industries . Case No. 9-376-054, Intercollegiate Case Clearing House, Boston / Mas. 1974.
  • Michael E. Porter: Interbrand choice, strategy and bilateral market power , Harvard Economic Studies, Harvard University Press, Cambridge / Mass. 1976.
  • Michael E. Porter: Market structure, strategy formulation, and firm profitability: The theory of strategic groups and mobility barriers . In: J. Cady (Ed.): Marketing and the public interest . Marketing Science Institute, Cambridge / Mass 1978, pp. 101-126.
  • Michael E. Porter: The Structure within Industry and Companies' Performance , in: The Review of Economics and Statistics , 62nd year 1979, pp. 214-227.
  • Michael E. Porter: Competitive Strategy. Techniques for Analyzing Industries and Competitors . Free Press, New York 1980.
  • Michael E. Porter: Strategic interaction: Some lessons from industry histories for theory and antutrust policy . In: SC Salop: Strategy, predation, and antitrustz analysis . Washington 1981, pp. 449-506.
  • Michael E. Porter: Cases in Competitive Strategy . New York: The Free Press 1983.
  • Michael E. Porter: Industrial Organization and the Evolution of Concepts for Strategic Planning: The New Learning . In: MDE, 4th year 1983, No. 3, pp 172-180.
  • Michael E. Porter: Competitive strategy, methods for analyzing industries and competitors . 1st edition, Campus, Frankfurt a. M. 1983.
  • Michael E. Porter: Competitive Advantage . Free Press, New York 1985.
  • Michael E. Porter: Competition in Global Industries . Boston / Mass 1986.
  • Jagdish Sheth, Sisioda Rajenda: The Law of Three. Why three companies always dominate a market and niche suppliers still have a chance . Redline, Munich 2003, ISBN 3-478-74490-3 .