Competitor-Oriented Objectives: The Myth of Market Share
Posted: 10 Jun 2008 Last revised: 30 Dec 2011
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: Suggested Citation