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


  • 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.

Suggested Citation

  • Cynthia A. Montgomery & Birger Wernerfelt, 1991. "Sources of Superior Performance: Market Share Versus Industry Effects in the U.S. Brewing Industry," Management Science, INFORMS, vol. 37(8), pages 954-959, August.
  • Handle: RePEc:inm:ormnsc:v:37:y:1991:i:8:p:954-959

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    Cited by:

    1. Paul-Valentin Ngobo & Eric Stéphany, 2001. "Les différences de performance financière entre les entreprises: résultats du marché français," Revue Finance Contrôle Stratégie,, vol. 4(1), pages 89-121, March.
    2. 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.
    3. 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.
    4. Lee, Yung-Kil & Park, Jin-Woo, 2016. "Impact of a sustainable brand on improving business performance of airport enterprises: The case of Incheon International Airport," Journal of Air Transport Management, Elsevier, vol. 53(C), pages 46-53.
    5. Armstrong, J. Scott & Collopy, Fred, 1996. "Competitor Orientation: Effects of Objectives and Information on Managerial Decisions and Profitability," MPRA Paper 81676, University Library of Munich, Germany.
    6. Yuping Zeng & Thomas J. Douglas & Changqi Wu, 2013. "The Seller's Perspective on Determinants of Acquisition Likelihood: Insights from China's Beer Industry," Journal of Management Studies, Wiley Blackwell, vol. 50(4), pages 673-698, June.
    7. Neil A. Morgan & Lopo Leotte Rego, 2006. "The Value of Different Customer Satisfaction and Loyalty Metrics in Predicting Business Performance," Marketing Science, INFORMS, vol. 25(5), pages 426-439, September.
    8. JS Armstrong & Fred Collopy, 2004. "Effects of Objectives and Information on Managerial Decisions and Profitability," General Economics and Teaching 0412014, EconWPA.
    9. 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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    firm resources; performance; market share;


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