Competitor-Oriented Objectives: The Myth of Market Share

Posted: 10 Jun 2008 Last revised: 30 Dec 2011

See all articles by J. Scott Armstrong

J. Scott Armstrong

University of Pennsylvania - Marketing Department

Kesten C. Green

University of South Australia - UniSA Business; Ehrenberg-Bass Institute

Abstract

Competitor-oriented objectives, such as market-share targets, are promoted by academics and are commonly used by firms. A 1996 review of the evidence, summarized in this paper, found that competitor-oriented objectives reduced profitability. We describe new evidence from 12 studies, one of which is introduced in this paper. The new evidence supports the conclusion that competitor-oriented objectives are harmful, especially when managers receive information about competitors' market shares. The evidence appears to have had little effect on managers' decisions and on what is taught in business schools.

Keywords: Competition, Market share, Objective, Profitability

JEL Classification: L2, M21, M31

Suggested Citation

Armstrong, J. Scott and Green, Kesten C., Competitor-Oriented Objectives: The Myth of Market Share. International Journal of Business, Vol. 12, No. 1, 2007, Available at SSRN: https://ssrn.com/abstract=1141514

J. Scott Armstrong (Contact Author)

University of Pennsylvania - Marketing Department ( email )

700 Jon M. Huntsman Hall
3730 Walnut Street
Philadelphia, PA 19104-6340
United States
215-898-5087 (Phone)
215-898-2534 (Fax)

HOME PAGE: http://marketing.wharton.upenn.edu/people/faculty/armstrong.cfm

Kesten C. Green

University of South Australia - UniSA Business ( email )

GPO Box 2471
Adelaide, SA 5001
Australia
+61 8 83012 9097 (Phone)

HOME PAGE: http://people.unisa.edu.au/Kesten.Green

Ehrenberg-Bass Institute ( email )

Australia

HOME PAGE: http://www.marketingscience.info/people/KestenGreen.html

Do you have a job opening that you would like to promote on SSRN?

Paper statistics

Abstract Views
505
PlumX Metrics