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Competitor-oriented Objectives: The Myth of Market Share


  • Armstrong, J. Scott
  • Green, Kesten C.


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.

Suggested Citation

  • Armstrong, J. Scott & Green, Kesten C., 2007. "Competitor-oriented Objectives: The Myth of Market Share," MPRA Paper 81674, University Library of Munich, Germany.
  • Handle: RePEc:pra:mprapa:81674

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    References listed on IDEAS

    1. Charles Abramson & Imran S. Currim & Rakesh Sarin, 2005. "An Experimental Investigation of the Impact of Information on Competitive Decision Making," Management Science, INFORMS, vol. 51(2), pages 195-207, February.
    2. JS Armstrong & Fred Collopy, 2004. "Effects of Objectives and Information on Managerial Decisions and Profitability," General Economics and Teaching 0412014, University Library of Munich, Germany.
    3. Buzzell, Robert D., 2004. "The PIMS program of strategy research: A retrospective appraisal," Journal of Business Research, Elsevier, vol. 57(5), pages 478-483, May.
    4. Armstrong, J. Scott & Brodie, Roderick J., 1994. "Effects of portfolio planning methods on decision making: experimental results," MPRA Paper 81684, University Library of Munich, Germany.
    5. Alvin Scodel & J. Sayer Minas & Philburn Ratoosh & Milton Lipetz, 1959. "Some descriptive aspects of two-person non-zero-sum games," Journal of Conflict Resolution, Peace Science Society (International), vol. 3(2), pages 114-119, June.
    6. JS Armstrong & Raymond Hubbard, 2005. "Does the Need for Agreement Among Reviewers Inhibit the Publication of Controversial Findings?," General Economics and Teaching 0502052, University Library of Munich, Germany.
    7. Mueller, Dennis C., 1992. "The corporation and the economist," International Journal of Industrial Organization, Elsevier, vol. 10(2), pages 147-170, June.
    8. repec:bla:stratm:v:8:y:1987:i:5:p:441-452 is not listed on IDEAS
    9. Anterasian, Cathy & Graham, John L., 1989. "When it's good management to sacrifice market share," Journal of Business Research, Elsevier, vol. 19(3), pages 187-213, November.
    10. JS Armstrong, 2004. "Peer Review for Journals: Evidence on Quality Control, Fairness, and Innovation," General Economics and Teaching 0412027, University Library of Munich, Germany.
    11. Arnett, Dennis B. & Hunt, Shelby D., 2002. "Competitive Irrationality: The Influence of Moral Philosophy," Business Ethics Quarterly, Cambridge University Press, vol. 12(03), pages 279-303, July.
    12. Morton Deutsch, 1958. "Trust and suspicion," Journal of Conflict Resolution, Peace Science Society (International), vol. 2(4), pages 265-279, December.
    13. John Dawes, 2000. "Market Orientation and Company Profitability: Further Evidence Incorporating Longitudinal Data," Australian Journal of Management, Australian School of Business, vol. 25(2), pages 173-199, September.
    14. 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.
    15. Ulf G. Marks & Sönke Albers, 2001. "Experiments In Competitive Product Positioning : Actual Behavior Compared To Nash Solutions," Schmalenbach Business Review (sbr), LMU Munich School of Management, vol. 53(3), pages 150-174, July.
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    Cited by:

    1. Neil Bendle & Mark Vandenbosch, 2014. "Competitor Orientation and the Evolution of Business Markets," Marketing Science, INFORMS, vol. 33(6), pages 781-795, November.
    2. de Villiers, Rouxelle & Woodside, Arch G. & Marshall, Roger, 2016. "Making tough decisions competently: Assessing the value of product portfolio planning methods, devil’s advocacy, group discussion, weighting priorities, and evidenced-based information," Journal of Business Research, Elsevier, vol. 69(8), pages 2849-2862.
    3. Woodside, Arch G., 2012. "Incompetency training: Theory, practice, and remedies," Journal of Business Research, Elsevier, vol. 65(3), pages 279-293.
    4. repec:spr:dyngam:v:8:y:2018:i:3:d:10.1007_s13235-018-0242-1 is not listed on IDEAS
    5. Snyder, Ralph D. & Ord, J. Keith & Koehler, Anne B. & McLaren, Keith R. & Beaumont, Adrian N., 2017. "Forecasting compositional time series: A state space approach," International Journal of Forecasting, Elsevier, vol. 33(2), pages 502-512.
    6. repec:spr:jmgtco:v:29:y:2018:i:3:d:10.1007_s00187-018-0270-4 is not listed on IDEAS
    7. Brokesova, Zuzana & Deck, Cary & Peliova, Jana, 2014. "Experimenting with purchase history based price discrimination," International Journal of Industrial Organization, Elsevier, vol. 37(C), pages 229-237.
    8. Chong, Josephine L.L, 2010. "Evaluating the impact of Arnould and Wallendorf's (1994) market-oriented ethnography," Journal of Business Research, Elsevier, vol. 63(12), pages 1295-1300, December.
    9. J. Scott Armstrong & Philippe Jacquart, 2013. "The Ombudsman: Is the Evidence Sufficient to Take Action on Executive Pay? Reply to Commentators," Interfaces, INFORMS, vol. 43(6), pages 602-604, December.
    10. Hanno Drews, 2008. "Abschied vom Marktwachstums-Marktanteils-Portfolio nach über 35 Jahren Einsatz? Eine kritische Überprüfung der BCG-Matrix," Metrika: International Journal for Theoretical and Applied Statistics, Springer, vol. 19(1), pages 39-57, May.
    11. Nippa, Michael, 2011. "Zur Notwendigkeit des Corporate Portfolio Management: Eine Würdigung der wissenschaftlichen Forschung der letzten vier Jahrzehnte," Freiberg Working Papers 2011/02, TU Bergakademie Freiberg, Faculty of Economics and Business Administration.

    More about this item


    Competition; Market Share; Objective; Profitability;

    JEL classification:

    • D4 - Microeconomics - - Market Structure, Pricing, and Design
    • L1 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance


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