> My question is is better for innovation if two companies have equal market share or if one has a smaller market share?
If that's your question, then the answer is obvious, isn't it? The higher the potential reward, the more motivation to innovate. If you only control 1% of the market, innovating might easily mean a 1000% growth of your company; but if you already own half, the best you can possibly do is double that. The upside just isn't there to justify big, risky plays.
That said, there is always a desire to grow, even if not by as much, so there is still incentive to not become stagnant and to continue making improvements to your products, even if marginal.
If that's your question, then the answer is obvious, isn't it? The higher the potential reward, the more motivation to innovate. If you only control 1% of the market, innovating might easily mean a 1000% growth of your company; but if you already own half, the best you can possibly do is double that. The upside just isn't there to justify big, risky plays.
That said, there is always a desire to grow, even if not by as much, so there is still incentive to not become stagnant and to continue making improvements to your products, even if marginal.