The Role of Competitive Action in Market Share Erosion and Industry Dethronement: A Study of Industry Leaders and Challengers

Abstract

Market share erosion and dethronement of market leaders are examined through the lens of “Austrian” economics. Our results suggest that leaders are more likely to experience market share erosion and/or dethronement when—relative to industry challengers—they are less competitively aggressive, carry out simpler repertoires of actions, and carry out competitive actions more slowly. These findings, based on seven years of data collected in 41 industries, contribute to research on hypercompetition, organizational decline, and competitive dynamics.