Should Your Brand Pick a Side? How Market Share Determines the Impact of Divisive Corporate Political Stances

When the public opinion on a social matter is divided, it is riskier for large brands to engage in activism than for small brands. As long as a brand’s initial market share is sufficiently small, engaging in activism can result in a net increase in customers even if the brand takes a stance that consumers overwhelmingly oppose. In contrast, large brands can lose more than they gain, even when opponents and supporters are in balance. Product quality or competitive prices are no insurance against taking the wrong stances. Consumers are willing to trade off price and quality for political values. Therefore, brands cannot dismiss the consequences of politics, even if they hold a traditional competitive advantage in price or quality.