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An Analysis of the Market Share-Profitability Relationship
Abstract
A number of researchers in the marketing, management, and economics disciplines have expressed reservations regarding the validity and generalizability of the reported relationships between market share and profitability. Against this backdrop, the authors performed a meta-analysis on 276 market share-profitability findings from forty-eight studies to address whether market share and profitability are positively related and to examine the factors that moderate the magnitude of that relationship. The authors found that, on average, market share has a positive effect on business profitability. However, the magnitude of the market share-profitability relationship is moderated by model specification errors, sample characteristics, and measurement characteristics. The relationship is moderated the most (and, on average, the relationship could be artifactual) when firm-specific intangible factors are specified in the profit model or the estimate of the market share-profitability relationship is based on an analysis of non-PIMS businesses. The authors discuss the implications of these results for the evaluation and utilization of market share information by managers in reference to strategies that focus on building market share as a means for increasing profits.
... However, at times, findings are inconclusive or even contradictory and require consolidation (Hanssens, 2018). A meta-analysis will help managers and researchers understand the effect's direction and magnitude (Szymanski et al., 1993). Furthermore, given the differences between backward-looking accounting performance measures and forward-looking financial market-performance ones, examining how outcomes vary by performance indicator is important. ...
... Our conceptual framework synthesizes, contrasts, and tests three predominant lenses, accounting for 85% of studies: resource-based theory (RBT), theory of cost (TOC), and transaction cost economics (TCE). Specifically, we follow Szymanski et al.'s (1993) and Edeling and Himme's (2018) approach and formulate and compare the three lenses' at-times-contradictory predictions on moderating effects. RBT displays the best predictive power to explain variance in servitization outcomes. ...
... First, we summarize three predominant theoretical lenses (RBT, TOC, and TCE) and their mechanisms from the literature on the effect of servitization on performance. Second, we adopt Szymanski et al.'s (1993) and Edeling and Himme's (2018) approach and juxtapose the three lenses' predictions on moderating effects. We hypothesize how factors related to the focal relationship (e.g., conceptualization of servitization and performance) and contextual factors (i.e., macroeconomic, industry, and geographic) may moderate the focal link. ...
The servitization literature has evolved into a rich field of academic inquiry that today calls for a consolidation of extant knowledge and opens new opportunities for meta-analytic reviews. The present research provides a fine-grained understanding of the servitization–firm performance relationship. We first develop an integrative conceptual framework that systematically ties together factors identified in prior research that affect the relationship. Through a meta-analysis of 379 effect sizes across 85 studies, we then provide broad-based empirical evidence that servitization indeed exerts a positive effect on firm performance. We further examine a broad set of potential moderators affecting the servitization–performance relationship to understand and explain the heterogeneity and, at times, the inconsistency of prior results regarding the relationship’s directionality and strength. Finally, we provide guidance for future research, from both a substantive and methodological standpoint, and sketch out an integrative conceptual model for future research.
... However, other studies have found that market concentration benefits organizations (Gallagher, Ignatieva, & McCulloch; Khan, 2016;Lee & Yang, 2016). The metaanalysis by Szymanski, Bharadwaj, and Varadarajan (1993) concludes that market share is, on average, 20% related to company performance. Based on the empirical review presented, the following hypothesis is presented: ...
... For market competitiveness, relative market share is used (Li, Nie, Zhao, & Li., 2017;Martin, 1983;Wu, Gao, & Gu, 2015). Market share is a measure that shows the portion that each company represents in a particular sector (Szymanski et al., 1993;Varadarajan & Kaul, 2018). ...
Purpose – This paper aims to analyze the industry characteristics and the strategic behavior of companies that affect zombie companies.Theoretical framework – The study was based on the structure-conduct-performance paradigm derived from industrial organization theory, because it allows us to explain a firm’s results through behavior influenced by external and internal factors.Design/methodology/approach – For the data analysis, the corrected standard errors technique was used on a data set of 99 companies registered in the Mexican Stock Exchange during the period from 2013 to 2017.Findings – Among the main findings, it is evident that strategic behavior affects zombie companies. On the other hand, we found that market competitiveness negatively affects zombie companies, while barriers to entry positively affect them. The results allow us to identify similarities with and differences from other zombie firms in the world, based on the Latin American environment and its institutional policy.Practical & social implications of the research – Zombie firms have a negative connotation; however, they may become necessary to keep businesses operational in developing countries. Also, the study may provide a background to regulations on firm bankruptcy.Originality/value – The most important contribution is that this is a pioneering investigation that analyzes strategic behavior and its effect on zombie companies. Also, this may be one of the first studies to examine these companies in Latin America, making it possible to identify differences from zombie firms in the rest of the world due to environmental elements such as institutional policy.Keywords – zombie firms, strategic behavior, industry effect, panel-corrected standard errors.
... A number of researchers in the marketing, management, and economics disciplines have expressed reservations regarding the validity and generalizability of the reported relationships between market size and profitability. Against this backdrop, Szymanski et al. (1993) performed a meta-analysis on 276 market size-profitability findings from fortyeight studies to address whether market size and profitability are positively related and to examine the factors that moderate the magnitude of that relationship. The authors found that, on average, market size has a positive effect on business profitability. ...
... The authors found that, on average, market size has a positive effect on business profitability. The findings of the present study corroborate the results of Szymanski et al. (1993). ...
Given the role and importance of competitiveness indicators for businesses’ performance and profitability, the question arises why no research has been undertaken internationally in this regard. Therefore, the main purpose of the present study is to investigate the impact of competitiveness index on the financial performance of top companies in the world using performance theory and to evaluate the validity of Global Competitiveness Index data. For this purpose, 176 top companies in the world from 2013 to 2018 that were profitable among the top 200 companies each year were selected as the statistical population. World Bank annual reports, Global Competitiveness Index, and Fortune site were used to collect the data. Also, the data analysis was done according to the panel data method using Eviews10 software. The results show that in general, there is a positive relationship between competitiveness index and financial performance of top companies in the world. On the other hand, the per capita income of the countries in which the top companies belonged was considered a control variable and the results show that the per capita income has a positive and significant relationship with the financial performance of the top companies in the world.
... Company goals are changing in time, which also affects the need to change some of the performance indicators (Striteska and Spickova, 2012). Organizational performance measurement models are primarily intended for practical use in companies, and for managers and executives to improve business performance and enable long-term sustainability. ...
... Profit Impact Marketing Strategy (PIMS) study (Buzell et al., 1975;Buzell and Gale, 1987) found the positive relationship between market share and profitability. Absolute positive or average positive impact of market share on profitability is supported by many authors (Porter, 1979;Szymanski et al., 1993;Shepard, 1972;Mueller, 1986;Buzzel, 2004;Bonoma and Clark 1988;Farris et al., 2010;Leverty, 2001). Some authors found that a positive link between market share and profitability is a result of management quality (Jacobson and Aaker, 1985;Rumelt and Wensley, 1980), while some authors found negative relationship between two variables (Armstrong and Green, 2007;O'Regan, 2002: Woo, 1981Jacobson, 1988). ...
Companies trigger significant resources for business activities. Key performance indicators (KPIs) are vital for strategic decision-making. The company identifies the ones specific to the industry. They need to be in line with company goals and the strategy. Apart from financial KPIs, there are non-financial KPIs that provide insights into the business. The company can use them as leading indicators of future business
performance potential. Non-financial indicators give an explanation of what the company needs to do to achieve financial goals. Using only financial performance indicators companies might decide to boost short-term profits. On the contrary, nonfinancial metrics are reflecting the long-term viability and health of the organization. New studies report that the use of non-financial KPIs is going to increase even more in
the coming years, entering into the finance team's domain. This paper identifies to which extent are travel agencies in Bosnia and Herzegovina using non-financial metrics for improving business performance. The goal is to determine which metrics have a significant impact on business performance and to what extent there is a correlation between them. This paper deals with selected non-financial metrics: brand preference, customer retention, customer experience, innovation, and market share.
The paper tests hypothesis that market share is a primary measure of business performance. Descriptive statistics and statistical tests are used for the analysis of primary data from the research.
... Drawing from research conducted by Szymanski, Bharadwaj, and Varadarajan in their 1993 study, the notion of business growth can be delineated through several pivotal indicators. These indicators encompass heightened levels of investment in marketing, an upward trajectory in productivity, and a steadfast commitment to increased investments in order to effectively align with and sustain the momentum of growth (Szymanski, Bharadwaj, & Varadarajan, 1993).It is noteworthy that the healthcare industry, specifically the medical schemes sector, operates within an environment characterized by the absence of robust regulatory frameworks for marketing services (Willie, 2023;Khathu, 2023). This particular context affords healthcare entities the latitude to employ a diverse array of marketing strategies to achieve their objectives (Willie, 2023). ...
... Drawing from research conducted by Szymanski, Bharadwaj, and Varadarajan in their 1993 study, the notion of business growth can be delineated through several pivotal indicators. These indicators encompass heightened levels of investment in marketing, an upward trajectory in productivity, and a steadfast commitment to increased investments to effectively align with and sustain the momentum of growth (Szymanski, Bharadwaj, & Varadarajan, 1993). It is noteworthy that the healthcare industry, specifically the medical schemes sector, operates within an environment characterized by the absence of robust regulatory frameworks for marketing services (CMS, 2019; Willie, 2023). ...
Strategizing effective marketing initiatives while considering their cost-related factors requires a targeted approach aimed at specific markets. The alignment of strategies with the intended markets is crucial to achieve desired outcomes. Research consistently emphasizes that successful marketing strategies should revolve around offering customers quality products at an affordable price point. However, the realm of medical schemes reveals a gap in comprehensively reporting marketing expenditure. Specifically, important attributes such as advertising expenditures and customer acquisition activities are not explicitly delineated, impeding a clear assessment of their value proposition for customers. The absence of comprehensive regulatory frameworks allows healthcare organizations to employ various marketing tactics, encompassing traditional advertising, direct marketing, digital marketing, and ad hoc marketing drives up marketing expenditure. Ad hoc marketing expenditure is notably prevalent in medical schemes, and a discernible trend of escalating expenditures in this category is evident. While this flexibility can be advantageous for organizations seeking to engage patients and expand their reach, it also opens the door to potential excesses and ethical concerns. Without adequate regulation, there is limited assurance that marketing activities align with ethical standards, respect patient autonomy, and prioritize responsible resource allocation. Moreover, the reporting limitations in the healthcare industry pose a formidable challenge. Healthcare marketing initiatives often involve nuanced and long-term objectives, such as building trust, enhancing patient education, and improving overall health outcomes. Measuring the direct impact of marketing expenditures on these multifaceted goals can be elusive, as traditional metrics may not capture the full spectrum of outcomes. This measurement gap hinders the ability to draw precise conclusions about the return on investment (ROI) of marketing efforts and their direct influence on membership growth. This research review aims to delve into the dynamics of marketing expenditures within medical schemes. The research objectives guide the analysis process, aiming to identify key factors driving marketing expenditures, understand variations in marketing strategies among different types of schemes, analyze the impact of marketing expenditures on growth and sustainability, and provide recommendations for optimal resource allocation. This study provides valuable insights into the challenges and implications of targeted marketing initiatives within the healthcare sector, particularly for medical schemes in South Africa.
... We measured sales growth as the compounded annual growth rate in sales, calculated as the natural logarithm of Sales J,T divided by Sales J,TÀ1 for firm J in year T (Brush et al., 2000). Early studies have also found a positive association between market share and firm performance (Montgomery & Wernerfelt, 1988;Szymanski et al., 1993), for example, due to greater market power (Smirlock et al., 1984). We, therefore, included market share as a control variable and measured it as the ratio of a firm's annual sales to the total annual sales of the industry (Bharadwaj et al., 1999). ...
Although prior research in operations management has explored the working capital-firm performance relationship, the results from these studies remain inconclusive, with studies finding positive, curvilinear, or even insignificant relationships. This is largely due to contingent factors that make this relationship both complex and idiosyncratic. To strengthen the beneficial effect of working capital on performance, firms must therefore make appropriate investments that would foster more objective, informed, and firm-specific working capital choices. This article examines one such investment, namely in information technology (IT), that can allow firms to optimize the working capital-firm performance relationship. This is important, as the role of IT in this relationship is yet to be explored. Using proprietary IT data from the Harte Hanks database, and based on a sample of 1,054 US-based manufacturing firms during 2011-2013, we find that IT investment positively moderates the performance effects of inventory, payables, and receivables cycles, and that these moderating effects vary by the type of IT investment, namely IT infrastructure and IT labor. Drawing on the theory of the Smart Machine, we explain how IT infrastructure and IT labor perform distinct roles that can help automate (i.e., use technology to increase the speed and accuracy of process execution) and/or informate (i.e., use technology to create new information), thereby moderating the working capital-firm performance relationship. We argue and find evidence that, due to the largely transactional nature of working capital processes, IT infrastructure has a relatively stronger moderating effect on performance than IT labor.
... Additionally, the model controls for the number of patents that have been annually granted to the company during the period of study (Thomas et al. 2011). Ultimately, the model controls for the positive effect of market share on profit 2 (Szymanski et al. 1993). The natural log of firm total assets measured in dollars operates as firm size. ...
This paper empirically examines the marketing strategy of advanced technological companies by contemplating the critical role of innovation and advertising when using market share as the central marketing metric. The focus of the empirical setting is the U.S. Information and Communications Technology industry, which includes 150 manufacturing and nonmanufacturing companies over a 10 year period. Surprisingly, the importance of the qualitative characteristics of the industry and its strategic initiatives are largely ignored in the literature. Our quantitative study demonstrates R&D has a significant positive effect on companies’ performance. Increasing the R&D share and the number of patents granted in advanced technological companies raises market share and revenue whereas increasing advertising alone has no significant effect on market share and revenue. Advertising effectiveness in this industry is systematically moderated over a short time. The results imply maintaining innovation efforts in advanced technology industries is necessary to yield better performance.
... Literatürde pazar payının kârlılıkla pozitif ilişki içinde olduğunu göstermektedir (Farris ve Reibstein, 1979;Szymansky, Bharadwaj ve Varadarajan, 1993) ve pazar payı ve ürün kalitesi, reklam harcamaları ve karlılık arasındaki ilişkiyi hafifletmektedir. Pazar payı, iki değişkenle çalışır: mutlak, toplam endüstri satışları ile karşılaştırıldığında ve en büyük firmalarla karşılaştırıldığında (Kim, 2000). ...
Bir markanın uzun dönemde yaşatılması için hangi stratejiler izlenmeli ve uzun dönemli markalama stratejileri nasıl olmalıdır ile ilgili literatürde çeşitli araştırmalar olmakla birlikte, uzun yıllardır iyi bir performans göstergeleri ile varlığını sürdüren büyük markalar tarafından uygulanan stratejiler de vardır. Fakat bir markanın yaşatılabilmesini etkileyen faktörlerin belirlenmesine ilişkin çalışmalar fazla değildir. Buradan hareketle, bu çalışmanın amacı markanın yaşatılmasını etkileyen faktörlerin belirlenmesi, markanın yaşatılmasına ilişkin bir modelin ileri sürülmesi ve markanın yaşatılmasına ilişkin ölçek geliştirilmesidir. Keşifsel araştırma niteliğinde olan bu çalışmada nitel ve nicel araştırma yöntemleri kullanılmıştır. Ölçek geliştirme 19 adımlık bir süreç izlenerek yapılmıştır. Ölçek oluşturma kapsamında aday maddeler indirgendikten ve görünüş geçerliliği yapıldıktan sonra pazarlama akademisyenleri ve banka yöneticileri olmakla iki örneklemde uzman görüşlerine dayalı uygulama yapılmış ve ölçeğe dâhil olan maddelerin Kapsam Geçerlilik Oranları (KGO) ve ölçeğin geneline ilişkin kapsam Geçerlilik İndeksi (KGİ) hesaplanmıştır. Markanın Yaşatılması literatürdeki dört önemli teoriye dayanmaktadır. Bu teoriler; Ürün Yaşam Döngüsü Teorisi (Levitt, 1965), Sürdürülebilirlik Teorisi (WCED, 1987), Kaynak Temlli Teori (Penrose, 1959; Barney, 1991) ve Karşılaştırmalı Rekabet Avantajı Teorisidir (Hunt ve Morgan, 1995). Araştırmanın sonucunda; "Markanın Yaşatılması" kavramı bulunmuş, tanımlanmış ve esaslandırılmıştır. Ayrıca Markanın Yaşatılmasına ilişkin kavramsal model geliştirilmiş ve bu modeldeki değişkenleri ölçmek için Markanın Yaşatılması ile ilgili ölçek önerisi ileri sürülmüştür. Markanın Yaşatılması ölçeğinin geneline ilişkin KGİ değeri α=0,05 anlamlılık düzeyinde 0,68 olmuştur. Markanın Yaşatılması pazarlama ve marka alanı ile ilgili yeni bir stratejik yönetim yaklaşımı sunmaktadır. Markanın yaşatılabilmesi için yöneticiler tarafından alınan kararlar, markanın sürdürülebilir rekabet avantajı sağlanmasına yönelik olarak tasarlanmasını gerekmektedir. Çünkü Markanın Yaşatılması stratejisi, işletme içerisindeki özgün, rekabet avantajı sağlayabilecek kaynakları en uygun şekilde kullanarak bir markanın uzun dönemde hayatta kalmasını ve yüksek performans göstergelerine ulaşarak marka ederini artırmasını sağlayan stratejik bir yaklaşımdır. Çünkü Markanın Yaşatılması stratejisi, işletme içerisindeki özgün kaynakları en uygun şekilde kullanarak bir markanın yüksek performans göstergelerine ulaşarak marka ederini artırmasını sağlayan stratejik bir yaklaşımdır. Markanın Yaşatılması stratejinin uygulanması zamanı bir markanın ve onun herhangi bir ürün ve hizmetinin yaşam döngüsünün hangi aşamasında olmasına ve faaliyet gösterdiği sektörün özelliklerini de dikkate alarak taklit edilemez kabiliyetler geliştirerek pazarlamada rekabet üstünlüğü sağlamaya odaklanılmalıdır.
Anahtar Kelimeler : Markalaşma, Pazarlama Teorisi, Stratejik Marka Yönetimi, Markanın Yaşatılması
... H1d: Positive (negative) changes in the focal firm's customer satisfaction are positively (negatively) associated with investor attention to the focal firm Ocasio (1997) argues (p.190): "The principle of situated attention indicates that what decision-makers focus on, and what they do depends on the particular context they are located in." In paying attention to a firm's stock, a key contextual factor for investors is competition (e.g., Szymanski et al. 1993). Recent studies report that competitive marketing actions can affect a focal firms' firm value (Warren & Sorescu, 2017a). ...
Investors' attention to a firm's stock has been demonstrated to influence stock returns (Da et al., 2011). But does a firm's marketing information draw attention to a firm's stock? Research in finance, accounting, and marketing has investigated advertising as one potential driver of investors' attention to a firm's stock. How about other potential marketing drivers? The authors develop hypotheses related to the impact of the changes in four marketing levers: advertising, product development announcements, WOM, and customer satisfaction on the change in investor attention to a firm's stock. Furthermore, they investigate the moderating role of competitors' marketing levers in these relationships.
To test the hypotheses, they compile a panel dataset with 349 firms covering the 2007-2017 period. The results suggest that the changes in the focal firm's advertising and WOM have a positive and significant impact on the changes in investor attention to the focal firm’s stock. Furthermore, these effects are amplified when there is an increase in competitors' advertising spending and WOM, respectively. For the customer satisfaction lever, the results suggest that the change in competitors' customer satisfaction enhances the impact of the change in focal firm's customer satisfaction on investor attention. Collectively, the results suggest that investors attend to the firm's and its competitors' marketing information in a much more nuanced manner than previously thought.
... Higher market share is usually associated with strategic advantages, product differentiation benefits, and higher profitability (e.g. Porter, 1980;Rhoades, 1985;Ross, 1986;Szymanski et al., 1993;Eckard, 1995). ...
... Also, increased market share and greater production go handin-hand, with the latter decreasing a company's cost to produce an individual unit due to economies of scale. All these factors contribute to increase profitability (Szymanski et al., 1993) This superior performance of the "aligned firms" is in line with empirical evidence (Ribeiro et al., 2009;Band and Scanlan, 1995;Arslan and Ozturan, 2011;Fleury and Fleury, 2003;Heracleous and Werres, 2016). ...
In this qualitative and exploratory study, a measurement of alignment of competencies with corporate strategy was carried out in nine steel mills, using a methodology developed specifically for this purpose. Four companies (“big and aligned”), accounting for 86% of the steel produced in the country, indicate full alignment of competencies with their strategies. Two companies (“small and partially aligned”), represent 4% of the market and try to reconcile the corporate strategy of technological orientation with short-term operational performance imposed on them by the business environment. In contrast to the latter, three companies (“small and not aligned”), having 10% of the combined market share, primarily concern themselves with performance in terms of productivity, without having synergy with the corporate strategy. The major contribution of this work is the development of a specific methodology to operationalize the mapping of core competencies, in order to facilitate the mobilization of resources to support business strategies.
... O valor econômico das decisões estratégicas de marketing vem recebendo interesse crescente na literatura de marketing (Hyman, Mathur, 2005;Greenyer, 2006;Kimbrough, McAlister, 2009). Estudos examinam os efeitos de decisões estratégicas de marketinginovações de produto, gastos com pesquisa e desenvolvimento, despesas de publicidade, qualidade do produto e satisfação do consumidorna rentabilidade da empresa e no valor de suas ações (Kaldor, 1950;Kirmani, Wright, 1989;Capon, Farley, Hoenig, 1990;Erickson, Jacobson, 1992;Szymanski, 239 Bharadwaj, Varadarajan, 1993;Leone, 1995;Knowles, 2003;Lehman, 2004;Byzalov, Shachar, 2004;Grullon, Kanatas, Weston, 2004;Fehle, Tsyplakov, Zdorovtsov, 2005;Chemmanur, Yan, 2009a, 2009bLuo, Homburg, Wieseke, 2010). ...
Thinking marketing strategies from a resource-based perspective (Barney, 1991), proposing assets as either tangible, organizational and human, and from Constantin and Luch’s vision (1994), where strategic resources can be tanbigle or intangible, internal or external to the firm, raises a research approach on Marketing and Finance. According to Srivastava, Shervani and Fahey (1998) there are 3 market assets types, which generate firm value. Firm value can be measured by discounted cashflow, compromising marketing activities with value generation forcasts (Anderson, 1982; Day, Fahey, 1988; Doyle, 2000; Rust et al., 2004a). The economic value of marketing strategies and marketing metrics are calling strategy researchers’ and marketing managers’ attention, making clear the need for building a bridge able to articulate marketing and finance form a strategic perspective. This article proposes an analytical framework based on different scientific approaches envolving risk and return promoted by marketing strategies and points out advances concerning both methodological approaches and marketing strategies and its impact on firm metrics and value, usgin Srinivasan and Hanssens (2009) as a start point.
... Under the market power theory, market share can be related to the financial performance. It has been found to be positive relationship [15], [16]. Based on the concept of the Structure-Conduct-Performance (SCP), a more concentrated bank due to the support of a greater market power leads higher profitability. ...
The objective of this research is to reveal the social role of Islamic banks in Indonesia in helping the nation survive in the midst of COVID-19 pandemic in the context of market share. This research highlights Islamic commercial banks in Indonesia. The mixed research method under sequential explanatory model is used in this research. The result of this research demonstrates that banks with the largest magnitude have shown a fixed position. There is no change of position on their concentration ratio at pre and along pandemic period. The final result of this research finds that all the banks have implemented their social role in the midst of coronavirus outbreak through the donation. A self-protection assistance tool for health workers is the type of donation provided by all the banks. Further finding in this research reveals that the magnitude of market share owned by the banks tends to reflect types of social involvement.
... Traditionally, companies put the focus on the profits from their products and use productcentric metrics, such as market share. The positive association between market share and return on investment has been proven in the past, with the logic being that firms with bigger market shares can gain economies of scale, increase market power and earn higher profits (Szymanski, Bharadwaj & Varadarajan, 1993). ...
... For a given level of the service ratio, a firm with a larger market share in its primary business markets should be better positioned to leverage its knowledge (e.g., wide, diverse product offerings) or resources (e.g., large, diverse customer base) than its lower-share competitors (Boulding and Staelin 1990). Similarly, firms with high market share should be able to leverage existing relationship and brand resources better than competitors with lower market share, which results in higher returns from their service transition efforts (Szymanski, Bharadwaj, and Varadarajan 1993). ...
The authors investigate the effectiveness of service transition strategies for generating shareholder value by evaluating secondary data pertaining to 477 publicly traded manufacturing firms during 1990–2005. The impact of a firm's transition to services on firm value (as measured by Tobin's q) remains relatively flat or slightly negative until the firm reaches a critical mass of service sales (20%–30%), after which point they have an increasingly positive effect. Furthermore, the effect of service sales on firm value depends on both firm and industry factors. Service transition strategies are more effective at enhancing value when the service offerings are related more to the firm's core business and when firms have more available resources (i.e., resource slack). The impact of adding services to core products on firm value amplifies as industry turbulence increases but diminishes when the firm's core products are in high-growth industries.
... A nontrivial significant gain and insignificant marginal returns for both targets and bidders indicate that opting for a merger may not be an appealing growth mechanism for the firms considering expansion of market share and achieving profitability. Particularly, as market share and firm profitability are usually seen as positively related (Mirzaei, Moore, & Liu, 2013;Szymanski, Bharadwaj, & Varadarajan, 1993). Under the OLS specification, on the day prior to the announcement day (t = −1), bidder firms register 2.64% CARs and −1.08% ARs; both are insignificant. ...
Mergers and acquisitions (M&As) are often surrounded by uncertainty since they do not always deliver the anticipated results. The uncertainty ascribed to the outcomes of M&As is not a boundary concept, rather guides firms’ decision in favour of or against undertaking M&As. Typically, M&As suffer from estimation biases. Moreover, M&As are always treated synonymously as a single entity. Thus, evaluating M&A as a single event under traditional stationary specifications is not adequate for capturing the disaggregate effect of an individual event. This study examines announcement returns of both events individually under the asymmetric specification. Asymmetric specification captures the variance of uncertainty associated with the event outcome for each set of events. The findings further document acquirers (acquisition sample) register pre-announcement wealth loss, but not so with mergers. The cross-sectional analysis indicates that the announcement returns under asymmetric specification are associated with the deal characteristics of both sets of events, except deal premium.
... Entretanto, Viger e Anandarajan (1999) encontraram apenas a metade das empresas por eles pesquisadas valendo-se do cálculo dos custos da qualidade, mas puderam confirmar que gestores que possuem acesso a custos da qualidade tomam (Jacobson e Aaker, 1987;Szymanski et al., 1993;Philips et al., 1983;Rust et al., 1985), em 1987, Jacobson e Aaker conseguiram encontrar relação positiva entre qualidade do produto e retorno sobre o investimento, fatia de mercado e preço. Flynn et al. (1995) (Feigenbaum, 1991, p. 110), podendo se tornar um elemento central para a determinação do retorno sobre o investimento (Feigenbaum, 1991, p. 134 ter-se-á um efeito direto na vantagem competitiva, ao mesmo tempo em que a percepção da gerência quanto à qualidade dos produtos e dos serviços aos clientes teria um impacto ainda maior. ...
Apesar do tema custos da qualidade continuar presente nas discussões acadêmicas, percebe-se pouca utilização prática de seus conceitos. Pesquisadores têm alertado para a baixa adesão de sua real implantação nas empresas. Alternativas, portanto, devem surgir para que uma empresa possa mensurar se seus esforços produzem desempenho superior para todas as suas partes interessadas. Propõe-se com este estudo a substituição das propostas tradicionais de mensurar os custos da qualidade distantes da prática contábil clássica pela avaliação de um conjunto de indicadores que meçam e monitorem a satisfação das partes interessadas em uma organização. Uma dessas ferramentas é a implantação da ISO 9000. Essa norma estabelece que uma organização deva monitorar informações relacionadas à percepção do cliente quanto ao atendimento de seus requisitos. Uma empresa, ao se certificar, produz melhores resultados, já que investe em melhoria contínua. A proposta deste estudo é apresentar resultados financeiros alcançados por companhias abertas brasileiras certificadas pela ISO 9000, evidenciando que elas se utilizam dos mecanismos gerenciais propostos pela norma para alcançar melhores resultados. Ao estudar 44 companhias abertas brasileiras certificadas, por meio de dados em painel estático no período de 1995 a 2006, percebeu-se que houve contribuição estatística significativa da certificação para a diminuição dos custos de produção e para o aumento do giro operacional dos ativos.
... Firm size and firm growth measured by a firm's total assets as well as market share, that is the proportion of a firm's sales to total sales of the four-digit NACE class in which it operates are included (e.g. Hirsch & Gschwandtner, 2013;Szymanski, Bharadwaj, & Varadarajan, 1993) to account for competitive advantages of larger and growing firms. We also explore possible nonlinearity in the relationship between size and profits by including a squared term of the size variable (Porter, 1985). ...
We investigate the drivers and persistence of profits in EU food retailing by focusing on differences between “top competitors” and fringe food retailers using a sample of 12,786 firms from France, Spain, and Sweden between 2006 and 2014. We detect a high degree of profit persistence in food retailing, presumably caused by strong bargaining power towards processors. Moreover, we find that profit persistence is higher for “top competitors” such as members of Top‐5 chains regarding sales and that independent/specialized supermarkets generate lower profitability. The results provide insights regarding power imbalances in food retailing and thus support the development of managerial strategies as well as measures to enhance market efficiency.
... While some marketing initiatives have a direct impact on sales revenues, other marketing actions impact revenues and profits indirectly and over time, for example, via brand equity that, itself, requires sustained investment to build and maintain (Keller & Lehmann, 2006). Certain non-financial outcomes marketers view as important and invest in, such as customer loyalty and market share, may only have a weak or contingent relationship with profitability (Reinartz & Kumar, 2000;Szymanski, Bharadwaj, & Varadarajan, 1993). This opacity of marketing efficiency raises questions whether marketing costs may outweigh any financial benefits they produce (Buzzell & Gale, 1987). ...
Voluminous research documents marketing’s ability to produce results. However, there is limited direct evidence relating firm marketing expenditure to profitability, or marketing efficiency. The challenge arises from poor data availability on marketing decisions in firms and questionable surrogates commonly used in place of marketing expenditure. In response, we collect actual marketing expenditure data in a representative sample of firms and investigate the relationship between marketing intensity and common measures of current and future performance. We find the impact to be positive. We contrast these results with findings based on selling, general and administrative expense (SG&A), which is a popular marketing proxy. We show that using SG&A may lead to questionable inferences about the impact of marketing spending on accounting performance. We propose an alternate, less noisy, approximation to total marketing expenditure and investigate the focal relationship among our sampled firms which do not disclose their marketing costs.
... Absolute market share has been used in this analysis instead of the relative one, since the considered companies belong to the same sector (see Szymanski et al. 1993 for further details of calculation). ...
This paper analyses the development of a performance assessment model for the most important listed companies operating in the energy sector, using a dataset obtained merging different sources. The construction of the model is based on a multiple criteria decision aid approach considering various indicators. The multidimensional nature of the topic in this paper requires the definition of a hierarchical structure of criteria, which has been aggregated into a composite index to obtain a final ranking for the energy companies under investigation. To handle with a hierarchical criteria structure and to take into account the space of fluctuations related to the imprecision on criteria weights, we employ the Hierarchy Stochastic Multi-Attribute Analysis. Thus, the proposed model is able to evaluate the performances of energy companies under different uncertainty scenarios. The results indicate that the first and last positions are quite robust in all considered scenarios, while the rankings relative to the intermediate positions vary widely by the chosen set of weights, exemplifying the need to rank companies based on multiple sets of criteria weights.
... Such an investment may alert competitors to the discovered niche and leads to other firms making similar decisions. Previous works in economics have associated higher market shares with profitability [5], [6]. Therefore, competitors' entrance to the market may be harmful to the investing corporation. ...
In decision-making problems, the actions of an agent may reveal sensitive information that drives its decisions. For instance, a corporation's investment decisions may reveal its sensitive knowledge about market dynamics. To prevent this type of information leakage, we introduce a policy synthesis algorithm that protects the privacy of the transition probabilities in a Markov decision process. We use differential privacy as the mathematical definition of privacy. The algorithm first perturbs the transition probabilities using a mechanism that provides differential privacy. Then, based on the privatized transition probabilities, we synthesize a policy using dynamic programming. Our main contribution is to bound the "cost of privacy," i.e., the difference between the expected total rewards with privacy and the expected total rewards without privacy. We also show that computing the cost of privacy has time complexity that is polynomial in the parameters of the problem. Moreover, we establish that the cost of privacy increases with the strength of differential privacy protections, and we quantify this increase. Finally, numerical experiments on two example environments validate the established relationship between the cost of privacy and the strength of data privacy protections.
This study examines insurance companies' financial performance and reporting trends within the medical sector using advanced clustering techniques to identify distinct patterns. Four clusters were identified by analyzing financial ratios and time series data, each representing unique financial performance and reporting consistency combinations. Dynamic Time Warping (DTW) and KMeans clustering were employed to capture temporal variations and uncover key insights into company behaviors. The findings reveal that resilient performers consistently report and have financial stability, making them reliable options for policyholders. In contrast, clusters of underperforming companies and those with reporting gaps highlight operational challenges and issues related to data consistency. These insights emphasize the importance of transparency and timely reporting to ensure the sector's resilience. This study contributes to the literature by integrating time series analysis into financial clustering, offering practical recommendations for improving data governance and financial stability in the insurance sector. Future research could further investigate non-financial indicators and explore alternative clustering methods to provide a deeper understanding of performance dynamics.
We study an important variant of the stochastic multi-armed bandit (MAB) problem, which takes penalization into consideration. Instead of directly maximizing cumulative expected reward, we need to balance between the total reward and fairness level. In this paper, we present some new insights into MAB and formulate the problem in the penalization framework, where a rigorous penalized regret can be well defined and a more sophisticated regret analysis is possible. Under such a framework, we propose a hard-threshold UCB-like algorithm, which enjoys many merits including the asymptotic fairness, nearly optimal regret, good tradeoff between reward and fairness. Both gap-dependent and gap-independent regret bounds have been established. Multiple insightful comments are given to illustrate the soundness of our theoretical analysis. Numerous experimental results corroborate the theory and show the usefulness of our formulation of the problem and our method to solve it.
This paper takes up the interesting phenomenon and behavior observed in practice of some firms which appears contrary to the normally expected market-share maximizing behavior. In practice, many firms have been found to not pursue market share relentlessly and aggressively, (which we refer to as the Active Phase) but prefer rather to level off their market share after a point of time (the Passive Phase) or exit the market. In this paper, we analyze such behavior through a simple mathematical model and examine whether there could be economic reasons for such behavior, and whether it would make for a good economic and financial decision. We find that in the Infinite Horizon case, it would not be optimal to withdraw from active marketing but to actively pursue market share indefinitely, whereas in the Finite Horizon case, we find that there could be a point of time where the Passive Phase could also be a viable option to pursue, and a profitable/beneficial economic decision.
CXOs, business heads and general managers are often required to track, report and explain changes in market share. And yet, market share gain may not always result in an increase in profits. This presents twin dilemmas: When does market share matter and is there a right way to measure it? Recent research by Abhi Bhattacharya, Neil Morgan, and Lopo Rego provides valuable insights into these questions. 1 Our essay illustrates these insights and gives managers a decision-centric approach to reveal under which contexts – business-to-business, business-to-consumer, products or services – market share matters for profits. We also highlight a critical insight about the metric: Share of revenues is a better predictor of profits than unit-based metrics related to market share, potentially impacting your decision-making process
This study examined product quality and organisational performance with a view of examining the impact of product quality and performance on market share of International Breweries. Two research questions and two hypotheses were formulated. A survey research design was used and data were obtained through the use of questionnaire. The population of this study was 125 staff members of marketing department and census approach was adopted in this study because the target population was low. Descriptive and inferential statistics were utilised to facilitate data analysis and the hypothesis was tested using linear regression analysis at 0.05 level of confidence. From the results of the analysis, the study showed that, market share was a function of product quality and performance. Based on this finding, the study concluded product quality and performance had impact on market share of International Breweries. It therefore recommended among others that management should continuously improve the quality of its product in order to achieve competitive edge. It is very imperative for the management to adopt innovation; creativity in order to enhance product quality and increase the market share of International Breweries. The management should invest in technology development in order to improve the quality of its product.
The important strategic implications of market share were and still needed to be clearly understood. In particular, the relationship between market share and profitability have not been settled in business literature until the mid-ninety of last century. Researchers were able clarify this relationship mainly because of The possibilities it provided by PIMS data. This paper reviews the main literature on the different aspects and concepts of market share and its strategic implications from 1974-1995; the period in which this topic was in its peak; which is in return has yielded the most important academic thoughts and inferences to the subject of strategic planning. The most notable one is with regard to the conclusion that market share caused profitability has been proven to be overly simplistic.
This study attempts to provide a strengthened understanding of how to mitigate perceived product risk by utilizing the effect of consumers’ trust transfer. Grounding on the theory of perceived risk, trust transfer framework, and social commerce theory, we propose an integrated model of trust-risk perspective on cross-border social commerce use. We tested the proposed model by conducting an online survey in Indonesia. In this work, we used a PLS-SEM analysis, a mediation and a suppression test, and a Multi-Group analysis. The results demonstrated that consumers’ trust can be transferred from the source of trust (platform and friend) to the target of trust (brand), which subsequently reduce perceived product as well as increase purchase intention. More interestingly, the results of the suppression effect testing show that friend trust was able to play a role as a suppressor factor in the relationship between brand trust and perceived product risk. The finding of the present study offers important implications for theory and literature by integrating trust transfer and perceived risk theory and taking into account perceived product risk as an important factor that potentially deters the effect of trust transfer on consumers’ intention to purchase. From a practical implication, we suggest that the best away to gain consumers’ trust in the global market is by conducting an intensive approach to prospective consumers through social media and promoting in popular marketplaces simultaneously.
Bu kitap 2011 yılında İstanbul Üniversitesi Sosyal Bilimler Enstitüsü’nce kabul edilmiş Doktora tezimden türetilmiştir. Tez çalışmamı kitap olarak yayınlatma kararı almamdaki en önemli neden, çeşitli bilim dallarında araştırmacılar tarafından yürütülen çalışmalarda, bağımlı değişkenin nitel (kategorik) olduğu durumlarla karşılaşılması ve bu tür problemlerin analizinde, bağımlı ve bağımsız değişkenler arasındaki ilişkinin klasik regresyon modeli ile kurulmasının mümkün olmaması ve bu noktada problemlerin modellenebilmesi için alternatif yöntemlere ihtiyaç duyulmasıdır. Bu kitap ile amaçlanan, araştırmacılara bağımlı değişkenin kategorik olduğu problemlerle karşılaştıklarında, değişkenler arasındaki ilişkileri kurabilmek için kullanılabilecekleri birçok uygun istatistik yöntem arasından, akademik çalışmalarda genellikle en çok tercih edilen ve bu tür modellerin analizinde kullanılması uygun olan İki Kategorili Lojistik Regresyon Analizi ile İki Kategorili Diskriminant Analizi hakkında, faydalanabilecekleri ve çalışmalarına ışık tutabileceğine inandığım bilgileri sunmaktır. Bu kitabın ilk bölümü, iki alt başlıktan oluşmaktadır. İlk alt başlıkta, Genelleştirilmiş Doğrusal Modellerden ve Doğrusal Olasılık Modeli ile Lojit ve Probit modellerden kısaca bahsedilmiştir. İkinci alt başlıkta, Lojistik Regresyon Analizi için modelin varsayımları, model kurma stratejileri, parametre tahmin yöntemi, anlamlılık ve uyum iyiliği testleri ile analiz sonuçunda elde edilen model parametrelerinin nasıl yorumlanması gerektiğiyle ilgili teorik bilgilere yer verilmiştir. İkinci bölümde, Diskriminant Analizi, analizin varsayımları, diskriminant fonksiyonun elde edilmesi, elde edilen fonksiyonun test edilmesi ve yorumlanması ile ilgili genel bilgiler paylaşılmıştır. Ayrıca bu analizin ayırıcı gücünün ve dışsal geçerliliğin nasıl ele alınabileceğiyle ilgili teorik bilgiler de bu bölüm içinde yer almaktadır. Üçüncü bölümde, işletme performansını etkileyebilecek faktörlerin araştırılması başlığı altında, işletme performans kriterleri ve işletme performansını etkileyebilecek faktörler ile finansal ve finansal olmayan oranlar hakkında kısa bilgiler verilmiştir. Kitabın son bölümü olan dördüncü bölümde, İstanbul Menkul Kıymetler Borsası’nda imalat sanayi sektöründe faaliyet gösteren işletmelerin 2007 yılı verilerinden elde edilen, performans göstergelerini etkileyen faktörlerin saptanması amacıyla, modellerin kurulma süreci ile diskriminant ve lojistik regresyon analiz sonuçları paylaşılmıştır. Ayrıca bu bölümde yer alan analiz sonuçlarıyla elde edilen çıktıların hem yorumlanma şekli acısından hem de elde edilen sonuçlar doğrultusunda yapılan çıkarımlar acısından bu kitabın, çalışmalarında bu yöntemleri kullanacak araştırmacılar için faydalanabilecekleri bir kaynak olacağını düşünmektedir. Kitabımın, bu konularda çalışan akademisyenler, lisansüstü ve lisans öğrencileri ile işletme alanındaki karar vericiler tarafından hem teorik hem de uygulama açısından başvuru kaynağı olarak görülebileceği inancıyla, tüm okuyuculara katkı sağlamasını ümit ederim.
Purpose: To what extent does competitive advantage mediate the relationship between interactive marketing practices and market performance? In attempt to respond to this question, this study was conducted with the aim of examining the mediating role of competitive advantage on the interactive marketing practices market performance relationship in the soft drink industry context. Methodology: A cross-sectional research design was taken on a sample of 322 soft drink manufacturing enterprises in the city of Kigali. The unit of inquiry for the quantitative study were the sales, accounting, finance, marketing and communication managers whereas chief executive officers were the unit of inquiry for the qualitative study. The study used both questionnaire and interview guide to collect data. Path analysis, MedGraph v3.xlsm and Hierarchical regression were used to test the model. Findings: Study findings show that performance of soft drink enterprises is positively associated with interactive marketing practices. It was observed in this study also that competitive advantage partially mediates this relationship. Practically the four conditions for mediation were met as suggested by Baron and Kenny, (1986). Firstly, we observe that there was a significant direct effect of Interactive marketing practices on market performance (=.270; p<.05). Secondly, Interactive marketing practices and competitive advantage have a significant relationship (=.400; p<.05), and thirdly, the observed coefficient of the mediator (competitive advantage) is significant as seen in the regression model 3 (=.396; p<.05). It is observed, finally, that the absolute effect of Interactive marketing practices on market performance is smaller in regression model 3 (=.157; p<.05) than in regression model 2 (=.270; p<.05).This confirm the mediation effects of competitive advantage. Further still a ratio index of 41.9% was observed an indication that competitive advantage reduces the relationship between interactive marketing practices and performance by 41.9% in Kigali city soft drink enterprises. Recommendations: In line with this confirmed mediation effects, managers are reminded to allocate sufficient resources to customer intimacy, product leadership and operational excellence as specific competitive priorities if they are to attain better market performance results. The study is of a theoretical importance as it empirically confirm the mediating role of competitive advantage in the interactive marketing practices-market performance relationship in a soft drink industry context. The imperative for practitioners to sufficiently attend to operational efficiency, customer intimacy and product leadership is reiterated on in this study.
The purpose of this study is twofold; 1). to find the measurement scale of service performance and 2). to examine the impact of service performance dimensions on customer satisfaction in Indonesian Islamic banking context. This study employs survey method with cluster sampling technique. Self-administered questionnaire, with 408 Islamic commercial bank customers as respondents, is used to collect the data/information. Confirmatory Factor Analysis (CFA) is adopted to test the dimensionality of service performance and customer satisfaction. Structural Equation Modeling (SEM) approach is employed to examine the impact of service performance dimensions on customer satisfaction. Results reveal 5 dimensions; physical, interactions, process, technology quality and sharia-compliance reflect service performance measurement scale. It is evidence that 3 dimensions; physical, process and sharia significantly impact on customer satisfaction. Interestingly, another 2 dimensions; interaction and technology do not significantly impact on customer satisfaction. Keywords: Service Performance; Customer Satisfaction; Islamic Banks; Structural Equation Modelling (SEM)
The operating environment for commercial banks in Kenya has become very dynamic and highly competitive. The witnessed cases of bank failure and poor financial performance have made commercial banks develop strategies to improve their financial performance, remain competitive, and meet the regulator's compliance requirements. Mergers and Acquisitions Strategies are on the rise as a strategy aimed to alleviate the ailing sector. In light of this, the purpose of this study was to examine the impact on financial performance of commercial banks in Kenya as a result of mergers and acquisitions Strategies. Operating efficiency and market share impact on the financial performance of commercial banks in Kenya formed the specific objectives. The study objectives were supported by synergies theory, resource-based view theory and agency theory. The study adopted a correlational descriptive research design, including cross-sectional data analysis. By the year 2017, 30 commercial banks in Kenya had considered mergers and acquisitions strategies were considered as the population of this study. An average of three-year ratios was computed in both pre-merger and post -acquisition periods inorder to assess the impact financial performance. The years of the deal were excluded. The mean difference between the pre-Mergers and Acquisitions Strategies and post-Mergers and Acquisitions Strategies ratios was tested using the T-test.The findings were that Mergers and Acquisitions Strategies have a statically positive significant relationship with the dependent variable. Recommends from the study are that, the policymakers create policies that facilitate and encourage commercial banks to employ mergers and acquisition strategies to achieve better financial performance.
The international business literature, while extensive by now, has given scant attention to the direct comparison of the performance of advanced economy multinational enterprises (AMNEs) and emerging market multinational enterprises (EMNEs) in international markets. In particular, the question of how well these firms perform in each other's home markets is an intriguing one. In this study, we examine "market share" performance of AMNEs and EMNEs in each other's countries using a comprehensive, longitudinal dataset. Drawing from the eclectic paradigm , we contend that, in comparison, EMNEs perform better as they: i) develop non-traditional ownership advantages based on their learnings in their home markets, and ii) expand into advanced economy markets relying on non-traditional ownership advantages. Our findings show a declining performance of AMNEs operating in emerging markets over time, while EMNEs generally appear to benefit from increased market shares in advanced economy markets for the same period.
E-business user agreements are seldom read but almost always accepted by users. We present an in-depth analysis of e-user agreement issues using textual data on Terms of Service (ToS) agreements from more than 250 e-commerce companies. Our text mining analysis identifies several terms in ToS that pose significant risks to consumers. We propose a prototype text mining process that scans ToS agreements on behalf of consumers and assigns an overall severity score based on the potential threats. We supplement this with Latent Semantic Analysis (LSA) for topic modeling in our corpus of ToS documents, to identify user-unfriendly clauses from ToS documents. Next, our empirical analysis reveals three novel findings. First, the presence of hostile clauses in ToS negatively impacts customer satisfaction but is associated with higher survival of firms. Second, firms with higher market share prefer less consumer-unfriendly terms in their ToS. Third, the impact of market share on firm performance is partially mediated by ToS severity. Overall, this study analyzes the linkage between market share, ToS severity, and firm performance, and provides significant insights on ToS policies to IS scholars, legal experts, and firms.
Purpose: The digital environment today has presented a great challenge for companies, locally and internationally on how they can leverage interactive marketing practices to maintain a warm relationship with their clients. The endless shifts in the customer journey map have made it, not only hard to manage customer experience, but also become more unpredictable. In due course, the imperative of complying with technology forces, to leverage customer patronage has put marketers to the task. The objective of the study was to establish the effect of interactive marketing practices on market performance of soft drink enterprises in Kigali City. Methodology: The study implemented a two-phase methodology that converged quantitative and qualitative methods to collect data. Simple random sampling technique was used to select 322 enterprises producing soft drinks in Kigali City which were later investigated using a self-report questionnaire and interview guide. To reduce the effect of the methods, the study collected evidence from both primary and secondary sources. Based on the response rate of 78%, the study carried out a validity and reliability check on 253 responses and used Pearson correlations and AMOS for analysis. Findings: The study established a positive and significant relationships between interactive marketing practices and market performance (r=.267, p<.01). 6.7% variations in market performance (Adjusted R Square=.067) was explained by interactive marketing practices. This finding shows that interactive marketing practices are relevant for soft drink firms in the region. Recommendation: On the basis of confirmed relationships, the study recommends that firms disseminate their marketing information using interactive marketing practices, since they cater for individual customer information needs and have multiplier effect on their purchase behaviour. Whereas the mixed conceptual ambiguities that still exist in literature could have affected the conceptualization and therefore results, this study also merely tested direct relationships, future studies may seek to test mechanisms through which specific Interactive Marketing Practices influence performance in a none soft drink sector.
Dewasa ini Usaha Menengah Kecil dan Mikro (UMKM) merupakan salah satu usaha yang sangat
menopang aktivitas ekonomi apalagi dalam kondisi krisis ekonomi dunia akibat pandemi covid-19.
Peningkatan UMKM menunjukkan bagaimana sektor ini masih menjadi andalan bagi perekonomian
masyarakat. Era revolusi industry 4.0 dan society 5.0 strategi pemasaran digital sangat berperan
dalam membangun jaringan, komunikasi dengan konsumen dan memperkenalkan produk atau jasa
sebuah perusahaan. Adapaun media digital yang umum diakses dalam mengimplementasikan
strategi pemasaran digital yaitu website, blog dan juga sosial media (Facebook, Instagram,
Whatsapp, Line, dsb), SEO, SEM, Email Marketing, Content Marketing, branding dan App
Development
Tight competition occurs in all lines of business, both in industries and services, including in small batik industries. In the past, small batik industries only could be found in the province of Central Java. However, the development of small batik industries recently can be found in several big cities, including Surabaya. Furthermore, batik industries can be successful in a business competition if they are able to manage their competitive advantage well, such as the product uniqueness, originality, and competitive prices. This research aims to investigate the concept of competitive advantage towards the performance of small industries, with the case study of Kampung Batik in Surabaya. The population in this study includes the head, owners, and managers of the Kampung Batik Small Industries in Surabaya, with a sample of 39 respondents. The analysis technique utilized in this research is Partial Least Square (PLS). Based on the results of data processing, it shows that the competitive advantage can contribute to the performance of Kampung Batik Small Industries in Surabaya.
Nowadays, activities of companies in dynamic and turbulent environments are described by using factors such as competitive intensity, unstable market conditions, rapidly changing technologies, and short product life cycle. Under such conditions, an effective strategy for declaring a product on the market increases the survival chance of a company and improves its performance. The purpose of this study was to analyze the distinctive effect of product positioning on the dimensions of performance in small and medium-sized enterprises. The provided model was tested on a sample of 118 SMEs active in the city of Kerman by using structural equation modeling and the Lisrel software. The present study was applied in purpose and a descriptive survey was employed as the method of data collection. In this study, a standard questionnaire was also used for data collection which was confirmed through the measurements of validity was used confirmatory factor analysis. The reliability of the instrument was measured cronbach's alpha. The results of this study revealed the direct effect of product positioning on customer satisfaction and costs of production and the indirect impact of positioning on company profitability. As a result, the distinction could lead to increased customer satisfaction and costs of production.
Der Leser kennt die verschiedenen Kategorien von Zielen in Unternehmen und insbesondere die verschiedenen Kategorien von Marketingzielen.
The authors propose that a general class of market response models with marketing parameter equations be used for the study of marketing interactions. They inventory alternative model specifications of marketing mix interactions, along with the estimation procedures, and compare two that are relevant in an application to the determinants of U.S. Navy salesforce effectiveness. The authors also illustrate the importance of modeling interactions as a basis for making inferences about marketing mix resource allocation.
Meta-analysis is arguably the most important methodological innovation in the social and behavioral sciences in the last 25 years. Developed to offer researchers an informative account of which methods are most useful in integrating research findings across studies, this book will enable the reader to apply, as well as understand, meta-analytic methods. Rather than taking an encyclopedic approach, the authors have focused on carefully developing those techniques that are most applicable to social science research, and have given a general conceptual description of more complex and rarely-used techniques. Fully revised and updated, Methods of Meta-Analysis, Second Edition is the most comprehensive text on meta-analysis available today. New to the Second Edition: * An evaluation of fixed versus random effects models for meta-analysis* New methods for correcting for indirect range restriction in meta-analysis* New developments in corrections for measurement error* A discussion of a new Windows-based program package for applying the meta-analysis methods presented in the book* A presentation of the theories of data underlying different approaches to meta-analysis
In this paper we develop a process model relating market share to firm profits. In particular, we specify average price and average cost equations as a function of previous year market share position, changes in market share, environmental conditions, and interactions of environmental conditions with the lagged market position and market share change variables. We estimate these equations using PIMS data after controlling for unobservable factors. Our results suggest that firms with high market shares derive no extra market power benefits except if they operate in environments with little buyer power. Instead, environmental factors and changes in market share most strongly influence price and cost. An analysis of the market share associated with maximal firm profits indicates that for the majority of firms in our sample steadily increasing market share does not always associate with increasing profits, giving credence to the proposition that "more market share is not always better."
A meta-analysis of results from 320 published studies relates environmental, strategic and organizational factors to financial performance. Some factors (e.g., concentration and growth) have been studied widely and have a relatively consistent positive impact on performance. Other widely-studied factors (e.g., size) have few consistent effects. Many factors (particularly organizational variables) are understudied. We suggest implications for research and management practice.
Despite recent attention to organizational issues in the management of advertising, sales, new product development, and channels, there has been little empirical study of the management of the marketing research function. The study reported complements earlier work on the use of marketing information in consumer goods businesses by examining factors seen as affecting the use of marketing information in industrial firms.
In a broad cross section of consumer goods businesses, market pioneers generally have substantially higher market shares than late entrants. In fact, the empirical association between order of entry and market share is almost as strong as the association between market share and return on investment. The authors examine theoretical sources behind this relationship. The empirical results suggest that the higher pioneer shares are derived from firm-based superiority as well as from consumer information advantages. Nine hypotheses are developed and tested empirically. The results also indicate that order of market entry is a major determinant of market share.
The authors attempt to assess what has been learned from econometric models about the effect of advertising on sales. Short-term and long-term advertising response as well as model fit are analyzed for 128 econometric models involving the impact of advertising on sales. The approach, a form of meta-analysis called “replication analysis,” treats the studies as imperfect experimental replications and uses ANOVA to identify sources of systematic variation. For short-term advertising elasticities, systematic variability is found related to model specification, estimation, measurement, product type, and setting of study. For advertising carryover and model goodness of fit, the “quasi-experimental design” is so imperfect that a high degree of sharing of explained variance among explanatory factors makes it difficult to identify the impact of a particular factor. Because the studies mostly address mature products in the U.S., suggestions are made for research needs crucial to better understanding of how advertising affects sales.
The author describes a meta-analysis of econometric studies that estimated the elasticity of selective sales or market share to price. The literature review yielded 367 suitable price elasticities from about 220 different brands/markets. The results indicate that the price elasticity is significantly negative and, in absolute value, eight times larger than the advertising elasticity obtained from a prior meta-analysis. The omission of distribution or quality, the use of only cross-sectional data, and temporal aggregation lead to severe biases in the estimates of price elasticity. The elasticity also differs significantly over the brand life cycle, product categories, estimation methods, and countries.
The process of knowledge utilization within firms has come to be viewed as an increasingly important area for research in light of its implications for organizational effectiveness. However, our current understanding of this phenomenon is limited because the process of knowledge use in organizations is complex and difficult to conceptualize and measure. Building on prior research in public policy, sociology, marketing, and other administrative disciplines, the authors first explicate the nature of knowledge utilization and propose a framework for circumscribing the concept of knowledge utilization. Next, using an emerging theoretical perspective on knowledge utilization, the “organizational” view, the authors present a conceptual model and research propositions that provide insights into informational and organizational factors that affect marketing knowledge utilization in firms.
The author presents a framework for thinking about the impact of information and information technology on marketing. The focus is on the concept of “information” or “knowledge” as both an asset to be managed and a variable to be researched. After developing a particular operationalization of the value of information in marketing contexts, which can be used to describe firms in terms of their relative levels of “information intensity,” the author presents a series of propositions examining the consequences of increasing information intensity for some key components of firm strategy and organizational structure. The concepts discussed are illustrated with a description of the transaction-based information systems that are being implemented in a variety of firms in pursuit of competitive advantage.
Few strategy concepts are more likely to give misleading insights than the experience curve. As a result there is considerable disenchantment with the simplistic market share prescriptions that marked the early applications. Nonetheless, the experience curve remains an extremely useful organizing framework when scale, technology and learning effects are influential forces in the environment. This article reviews the measurement and interpretation problems that have to be overcome before the experience curve can be productively applied. Conclusions provide rewarding topics for further research.
In a field study, decision makers were found to choose information sources based on accessibility rather than quality. Some variation in source use was associated with individual characteristics such as motivation and tenure. Implications of the results are discussed for studies of communication and decision making.
The authors use meta-analysis techniques to investigate the evidence that has been gathered on the determinants of salespeople's performance. A search of the published and unpublished literature uncovered 116 articles (the list of which is available upon request) that yielded 1653 reported associations between performance and determinants of that performance. The results indicate the determinants can be ordered in the following way in terms of the average size of their association with performance: (1) role variables, (2) skill, (3) motivation, (4) personal factors, (5) aptitude, and (6) organizational/environmental factors. When ordered according to the amount of the observed variation in correlations across studies that is real variation (i.e., not attributable to sampling error), the determinants rank as follows: (1) personal factors, (2) skill, (3) role variables, (4) aptitude, (5) motivation, and (6) organizational/environmental factors. To investigate whether the associations between each of the categories of predictors and performance could be partially accounted for by the presence of moderator variables, the results were broken out by customer type, product type, and type of dependent measure used. The results indicate that the strength of the relationship between the major determinants and salespeople's performance is affected by the type of products salespeople sell. The authors discuss the implications of these findings for sales managers and researchers.
A successful JIT program requires large amounts of capital and a revamping of labor/management relationships. Many wood product manufacturers are now pursuing the Just In Time (JIT) method of manufacturing. Unfortunately, many of these manufacturers are dealing with only one of the five elements needed for success. Success means reducing unit production costs while improving customer service. Costs are reduced via smaller material and work in process inventories, less waste, a lower labor cost content, and a higher production rate. Customer service is improved by living up to promised delivery dates of delivering faster than promised.
Latest research on the PIMS database shows that ROI increases as R&D expenditures increase, and that R&D spending leads to gains in market share and gross margins.
The PIMS research program is examined in eight key areas. In general, the PIMS approach was found to be the best current attempt to gather and analyze data on strategic actions of businesses. Suggested improvements will enhance its usefulness to the practitioner. These improvements will further the state of theoretical model building and validation in the strategy field.
Relatively little is known about how managers interact with marketing decision support systems such as a computer simulation. The authors investigate individual difference variables to determine their role in influencing the utilization of and satisfaction with one component of a marketing decision support system. The research vehicle used is a computer simulation model for assisting decision making in retailing. The findings indicate that risk averseness, involvement, cognitive differentiation, and age are important predictors of utilization and satisfaction. Managerial implications of the findings are discussed.
The authors investigate the effects of the organizational structure used for marketing planning on the credibility and utilization of marketing plans. Data on 53 organizations were obtained from multiple respondents in the marketing areas of those organizations. The results indicate that a bureaucratized planning structure with formal rules and procedures and departmental specialization can enhance both plan credibility and utilization. However, high centralization of authority affected these variables negatively. The explanatory mechanisms suggested by these results are discussed and managerial implications presented.
This article evaluates the dynamic interaction of market share and profit. The determinants of market share are compared with published empirical research and illustrated in a consumer product industry. The effects of market growth, maturity and decline, competitive attack, price leadership, and heavy user strategies on market share and profit are analyzed theoretically and simulated over a 10-year period.
The authors conducted a meta-analysis of the generics literature. The meta-analysis reveals the strongest predictors of a proneness to buy generic products are consumer perceptions of generics' quality and price and consumers' overall evaluation of generic products. Demographic and psychographic variables and consumer shopping behaviors are related only weakly to consumers' proneness to buy generics.
A behavioral simulation in a laboratory setting was used to investigate decision makers' evaluation and use of marketing research results. Propositions about the persistence of the decision makers' prior beliefs under various research design conditions (qualitative interview or quantitative survey, convenience or probability sampling, large or small sample size) were tested. Support for most of the propositions is found, suggesting that research confirming prior beliefs tends to be rated higher and used whereas research contrary to prior beliefs tends to be evaluated as poor and is less likely to be used.
This paper surveys the body of research conducted by marketing and strategic management researchers using the PIMS database. Research questions and findings from this research are summarized. A methodological critique is offered, and its overall relevance is evaluated in terms of a recent conceptual framework suggested by Thomas and Tymon (1982).
A central assumption of meta-analysis is that the sample of studies fairly represents all work done in the field, published and unpublished. However, if studies with "poor" results are less likely to be published, a potential publication bias is present. The authors propose a maximum likelihood approach to estimating publication bias for the situation in which censorship based on effect size may occur. An explicit hypothesis test is provided for testing whether or not censorship is present. The method also simultaneously estimates the proportion of studies censored, the threshold past which censorship is avoided, and the probability of censorship if a potential observation is under the censorship threshold. Two published meta-analyses are examined and some publication bias is found in each, but no publication bias is detected in a meta-analysis of proprietary research data.
This study uses a causal modelling methodology to examine competing methodological and theo- retical hypotheses concerning the effects of prod- uct quality on direct costs and business unit re- turn on investment (ROI). Results show that the PIMS' measures under study exhibit high reliabil- ity across all samples. The findings fail to support the widely held view that a high relative quality position is incompatible with achieving a low rel- ative cost position in an industry.
I. The concentration-profits hypothesis, 294. — II. Industry definition, measure of concentration, and selection of sample, 297. — III. Character and limitations of profit data, 305. — IV. Calculation of accounting profit rates, 310. — V. Association of industry profit rates and concentration, 311. — VI. Association of firm profit rates and industry concentration, 317. — VII. Association of profit rates with other determinants, 321. — VIII. Summary, 323. Copyright, 1951, by the President and Fellows of Harvard College.
A meta-analysis of 213 applications of diffusion models from 15 articles relates model parameters to the nature of the innovation, the country under study, model specification, and estimation procedure. The effect of use of the same data by several researchers is examined, as are weighting schemes for improving efficiency of the meta-analysis. A Bayesian scheme is used to combine results from the meta-analysis with new data for estimation of parameters in a new situation.
We investigate the impact of increasing the number of items made in a cell on its performance. The optimal lotsizes of production and queuing delays are both shown to increase with increased product mix. However, these adverse effects diminish as more items are assigned to the cell. We also examine a strategy of sequencing which attempts to minimize the number of setups by looking ahead in the queue and processing all items for which the machine is already setup. In the case of similar items, it is found that this sequencing policy results in little savings in setup time.
Now nearing its 60th printing in English and translated into nineteen languages, Michael E. Porter's Competitive Strategy has transformed the theory, practice, and teaching of business strategy throughout the world. Electrifying in its simplicity -- like all great breakthroughs -- Porter's analysis of industries captures the complexity of industry competition in five underlying forces. Porter introduces one of the most powerful competitive tools yet developed: his three generic strategies -- lowest cost, differentiation, and focus -- which bring structure to the task of strategic positioning. He shows how competitive advantage can be defined in terms of relative cost and relative prices, thus linking it directly to profitability, and presents a whole new perspective on how profit is created and divided. In the almost two decades since publication, Porter's framework for predicting competitor behavior has transformed the way in which companies look at their rivals and has given rise to the new discipline of competitor assessment.
More than a million managers in both large and small companies, investment analysts, consultants, students, and scholars throughout the world have internalized Porter's ideas and applied them to assess industries, understand competitors,, and choose competitive positions. The ideas in the book address the underlying fundamentals of competition in a way that is independent of the specifics of the ways companies go about competing.
Competitive Strategy has filled a void in management thinking. It provides an enduring foundation and grounding point on which all subsequent work can be built. By bringing a disciplined structure to the question of how firms achieve superior profitability, Porter's rich frameworks and deep insights comprise a sophisticated view of competition unsurpassed in the last quarter-century.
Book Description
Publication Date: June 1, 1998 | ISBN-10: 0684841487 | ISBN-13: 978-0684841489 | Edition: 1
Clique Aqui
The market share-ROI relationship is examined to determine the extent of the causal versus spurious association. By making use of the PIMS data base, it is found that a large proportion of the association is spurious in the sense that both market share and ROI are the joint outcome of some third factor(s). The direct impact of market share on ROI is found to be much smaller than previous studies have indicated. It is suggested that too much emphasis is placed on market share and that more attention needs to be focused on other fundamentals.
The decision to build market share has major resource-allocation implications. To aid managers in assessing these implications, research was conducted to determine general relationships between changes in market share and variables representing market strategies and competitive position. The research was based on multiproduct, cross-sectional regression analyses and includes variables that are—or should be—readily available to most businesses.
This study evaluated the impact of market share on three measures of business-level risk: ROI variation, share instability and the difference between growth in price and growth in cost. The analysis also included conduct variables which might bear upon these relationships. The sample was drawn from the PIMS data base and consisted of mature industrial businesses separated into three types of market environments. Path analysis was employed and yielded partial support for the risk-reduction benefits of market share.
While previous research on the relationship between market share (MS) and business profitability (BP) has found a positive relationship, its nature (i.e. direct versus spurious), its context-specificity, and the validity of MS as a predictor of BP have not been adequately addressed. Employing path analysis, this study examined the nature of this relationship across a taxonomy of homogeneous environments. The major findings were that (1) the association between MS and BP is context-specific; (2) both direct and spurious relationships exist, and their relative strengths vary across environments; and (3) the validity of MS as a predictor of BP is context-specific. Further, key firm conduct variables accounting for the spuriousness have been identified. Finally, implications of these findings for managers pursuing market share as a goal are discussed.
This study partitions the total variance in rate of return among FTC Line of Business reporting units into industry factors (whatever their nature), time factors, factors associated with the corporate parent, and business-specific factors. Whereas Schmalensee (1985) reported that industry factors were the strongest, corporate and market share effects being extremely weak, this study distinguishes between stable and fluctuating effects and reaches markedly different conclusions. The data reveal negligible corporate effects, small stable industry effects, and very large stable business-unit effects. These results imply that the most important sources of economic rents are business-specific; industry membership is a much less important source and corporate parentage is quite unimportant.
In production scheduling, time performance is usually taken to be the province of sequencing models which take task processing times to be given. However, in practice, processing times can often be controlled by the choice of lot sizes which thus have a major impact on makespan, waiting times, flow times and other measures. Here the interface between lot sizing and sequencing is introduced and the effect of lot sizes on makespan and flow times is qualitatively analyzed.
Conventional management accounting principles used to evaluate relevant costs have been developed under the assumption of deterministic manufacturing settings. Manufacturing operations, however, are complex and stochastic. In this paper we examine the impact of stochasticity in the production process on relevant costs based on a dynamic assessment of capacity constraints. We develop a model to analyze the behavior of relevant costs with respect to changes in the expected duration and variability in set-ups and processing. An implication of this analysis is that for profit maximization capacity will exceed expected demand if production rates or demand are stochastic.