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Friday, January 26, 2007

Myth of Market Share?

We have mentioned and interacted with Wharton Prof J. Scott Armstrong here a number of times. A new article of his is in Knowledge@Wharton: The 'Myth of Market Share': Can Focusing Too Much on the Competition Harm Profitability?
" ... It is a common practice of many companies to focus their attention on grabbing market share from their competitors. But such efforts can actually be detrimental to the firm's profitability, according to Wharton marketing professor J. Scott Armstrong. For years, Armstrong has been conducting research showing that competitor-oriented objectives, such as setting market-share targets, are counterproductive. After co-authoring a paper in 1996 that reached this conclusion, he and a different co-author, Kesten C. Green of Monash University in Australia, have written another paper summarizing 12 new studies that add additional weight to the original conclusion. Their study is titled, "Competitor-oriented Objectives: The Myth of Market Share." ...

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