MANUFACTURING CAPACITY, MARKET SHARE, AND COMPETITIVENESS

Abstract

This article examines the relationship between production capacity and the ongoing battle for market share. Many firms use market share as a performance indicator to measure how well they are doing in comparison to their competitors. However, capacity increases can increase the number of firms that regard the firm as a competitor, thereby expanding the firm's competitive arena and limiting the affect of any hoped‐for market share increase. Managers should evaluate the competitive response of a capacity increase, especially with firms that will likely become new competitors, in order to gain an accurate picture of the likely post‐increase scenario.

Citation

Bloodgood, J.M. and Katz, J.P. (2004), "MANUFACTURING CAPACITY, MARKET SHARE, AND COMPETITIVENESS", Competitiveness Review, Vol. 14 No. 1/2, pp. 60-71. https://doi.org/10.1108/eb046468