Wharton marketing professor J. Scott Armstrong has been conducting research for years showing that competitor-oriented objectives, such as setting market-share targets, are counterproductive.
"We're not saying companies shouldn't pay attention to their competitors; they might be doing reasonable things that you may also want to do," Armstrong says. "What we're saying is that the objective should not be to try to beat your competitor. The objective should be profitability. In view of all the damage that occurs by focusing on market share, companies would be better off not measuring it."
One of the examples from the paper was on the game industry. It points to the fact that as Microsoft, with its XBox, and Sony, with its Playstation, have been "beating each other's brains out trying to capture the biggest share of the video-game market" while "third-place Nintendo, with its new game console called Wii (pronounced "wee"), has quietly become the most profitable game console company in Japan."
I think one major lesson here is that businesses need to focus on customers and profits, in that order, rather than who has the biggest stick!