Marketing Papers

Document Type

Working Paper

Date of this Version

February 2006

Abstract

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, indicated that competitor-oriented objectives reduce profitability. However, we found that this evidence has been ignored by managers. We then describe evidence from 12 new studies, one of which is introduced in this paper. This evidence supports the conclusion that competitor-oriented objectives are harmful, especially when managers receive information about market shares of competitors. Unfortunately, we expect that many firms will continue to use competitor-oriented objectives to the detriment of their profitability.

Comments

Forthcoming in International Journal of Business. The author has asserted his/her right to include this material in ScholarlyCommons@Penn.

Keywords

competition, market share, objectives, profitability

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Date Posted: 26 June 2006