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Are U.S. Managers Superstitious about Market Share?Topic: Marketing
Reprint 3745; Summer 1996, Vol. 37, No. 4, pp. 67–77
Does the strategy of linking market share to profits really work? This investigation argues that there is simply no causal relationship between market share and profits. In highly volatile industries, market-share-based strategies can be misleading. The authors provide evidence from two studies, one using the FTC Line of Business data and the other employing data on the performance of sixty-three companies in three countries. In the first case, companies that maintained stable operations were more profitable than those that maintained stable market shares. In the latter, Japanese companies in a wide variety of industries had more stable operations than comparable U.S. firms. is a consultant at Egon Zehnder International, Inc. in Los Angeles, California. is a professor of marketing and international business at the Graduate School of Management, University of California, Irvine. is a professor of international business at the College of Business Administration, University of South Carolina.
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