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Sources of Superior Performance: Market Share Versus Industry Effects in the U.S. Brewing Industry


Author Info

  • Cynthia A. Montgomery

    (Harvard Business School, Boston, Massachusetts 02163)

  • Birger Wernerfelt

    (Sloan School of Management, Massachusetts Institute of Technology, Cambridge, Massachusetts 02139)


Using financial measures of performance we investigate the sources of value creation in the U.S. brewing industry between 1969 and 1979. We find that market share gains in this industry at this time are not correlated with changes in value and that the performance of individual leading firms is highly correlated. Our interpretation is that the success of market share building strategies depends critically on specific industry conditions. Specifically, in the absence of fundamental shifts in the relative resource positions of individual firms, share gains may come at too high a price. In addition, the research shows that intra-industry correlations in returns may result from excessive competition rather than collusion.

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Bibliographic Info

Article provided by INFORMS in its journal Management Science.

Volume (Year): 37 (1991)
Issue (Month): 8 (August)
Pages: 954-959

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Handle: RePEc:inm:ormnsc:v:37:y:1991:i:8:p:954-959

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Related research

Keywords: firm resources; performance; market share;


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Cited by:
  1. JS Armstrong & Fred Collopy, 2004. "Effects of Objectives and Information on Managerial Decisions and Profitability," General Economics and Teaching 0412014, EconWPA.
  2. Suárez, Fernando F., 1960- & International Center for Research on the Management of Technology., 1991. "Dominant designs and the survival of firms," Working papers 3340-91. WP (Internationa, Massachusetts Institute of Technology (MIT), Sloan School of Management.
  3. Matko Koljatic & Fernando Lefort, 1999. "Market, Corporation And Business Unit Effects:What Do They Account For?," Abante, Escuela de Administracion. Pontificia Universidad Católica de Chile., vol. 2(1), pages 23-50.
  4. Fam, Kim-Shyan & Yang, Zhilin, 2006. "Primary influences of environmental uncertainty on promotions budget allocation and performance: A cross-country study of retail advertisers," Journal of Business Research, Elsevier, vol. 59(2), pages 259-267, February.


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