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Competition: Difference between revisions
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However, competition may also lead to wasted (duplicated) effort and to increased [[cost]]s (and prices) in some circumstances. For example, the intense competition for the small number of [[superstar|top jobs in music and movie-acting]] leads many aspiring musicians and actors to make substantial investments in training which are not recouped, because only a fraction become successful. Critics{{which|date=March 2020}} have also argued that competition can be destabilizing, particularly competition between certain financial institutions. | However, competition may also lead to wasted (duplicated) effort and to increased [[cost]]s (and prices) in some circumstances. For example, the intense competition for the small number of [[superstar|top jobs in music and movie-acting]] leads many aspiring musicians and actors to make substantial investments in training which are not recouped, because only a fraction become successful. Critics{{which|date=March 2020}} have also argued that competition can be destabilizing, particularly competition between certain financial institutions. | ||
Experts have also questioned the constructiveness of competition in profitability. It has been argued that competition-oriented objectives are counterproductive to raising revenues and profitability because they limit the options of strategies for firms as well as their ability to offer innovative responses to changes in the market.<ref>{{cite journal |url= http://marketing.wharton.upenn.edu/documents/research/CompOrientPDF%2011-27%20%282%29.pdf |title= The Profitability of Winning |author1= J. Scott Armstrong |author2= Fred Collopy |journal= Chief Executive |pages= 61–63 |year= 1994 |access-date= 2011-12-06 |archive-url= https://web.archive.org/web/20100622023252/http://marketing.wharton.upenn.edu/documents/research/CompOrientPDF%2011-27%20(2).pdf |archive-date= 2010-06-22 |url-status= dead | quote = A 1996 review of the evidence, summarized in this paper, found that competitor-oriented objectives reduced profitability. | Experts have also questioned the constructiveness of competition in profitability. It has been argued that competition-oriented objectives are counterproductive to raising revenues and profitability because they limit the options of strategies for firms as well as their ability to offer innovative responses to changes in the market.<ref>{{cite journal |url= http://marketing.wharton.upenn.edu/documents/research/CompOrientPDF%2011-27%20%282%29.pdf |title= The Profitability of Winning |author1= J. Scott Armstrong |author2= Fred Collopy |journal= Chief Executive |pages= 61–63 |year= 1994 |access-date= 2011-12-06 |archive-url= https://web.archive.org/web/20100622023252/http://marketing.wharton.upenn.edu/documents/research/CompOrientPDF%2011-27%20(2).pdf |archive-date= 2010-06-22 |url-status= dead | quote = 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.}}</ref> In addition, the strong desire to defeat rival firms with competitive prices has the strong possibility of causing [[price war]]s.<ref>{{cite journal | url = http://qbox.wharton.upenn.edu/documents/mktg/research/Profitability%20of%20winning.pdf | title = Competitor-oriented Objectives: The Myth of Market Share | author1 = J. Scott Armstrong | author2 = Kesten C. Greene | journal = International Journal of Business | volume = 12 | issue = 1 | pages = 116–34 | year = 2007 | issn = 1083-4346 }}{{Dead link|date= November 2019 |bot= InternetArchiveBot |fix-attempted= yes }}</ref> | ||
==Forms== | ==Forms== | ||