11 'Superfirms' that dominate their markets

Thesis Series #5

After analysing 8,430 firms across 81 industries.

I found just 11 dominate their market:

This was good news, on two fronts:

1) That market dominance exists.

2) It is incredibly rare.

As a result, I called these 11 companies ‘Superfirms’.

(I explained in an earlier post that I define a Superfirm as a company with the largest profit share of their industry, and the profit share also met the conditions of technical dominance).

Here’s the list of Superfirms and their share of industry profits:

1) United Parcel Service (UPS) - 80%

2) Genuine Parts Company - 48%

3) Proctor & Gamble Unilever - 59%

4) Unilever - 51%

5) Gilead Sciences - 48%

6) Microsoft - 51%

7) Cisco - 63%

8) Apple - 78%

9) China Mobile - 46%

10) The Walt Disney Company - 60%

11) Alphabet - 57%

The table below shows a lot more information, such as the industry, the threshold for dominance and the firms positioned as second and third profit share in the industry. It shows how extraordinary these 11 firms are and positioned the rest of my research perfectly.

With hindsight, this finding was very lucky. I had a notion of market dominance as a result of learning Apple’s share of industry profits. I found a formula to help calculate it with large datasets. The approach resulted in 11 firms I could analyse further.

In my PhD research project, I sought to understrand whether market dominant firms strategically aligned with external drivers of transformation more than their competitors.

To move it forward, I needed to develop a set of propositions that could explain how these firms achieved dominance.

I’ll go through that in my post tomorrow.

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This post is part of a series of notes I am writing on my PhD thesis, sharing how I approached it and what I learned. You can see the entire series on my website.