The Antecedents and Consequences of Market Driving Approach

• Main Authors: Jen-Tang Chang, 張人堂
• Other Authors: PeirChyi Lii
• Format: Others
• Language: en_US
• Published: 2006
• Online Access: http://ndltd.ncl.edu.tw/handle/99548839565455946403

碩士 === 淡江大學 === 管理科學研究所企業經營碩士在職專班 === 94 === The recent book Blue Ocean Strategy by Kim and Mauborgne (2005) suggests that firms try to develop their capabilities to create uncontested market spaces instead of competing with each other in existing market spaces. While their use of the phrase ''blue ocean'' is probably new, their ideas are actually derived from the concept of market driving strategies. Two major proposals have been made concerning market driving strategies. First, Jaworski et al. (2000) discussed how market driving may be achieved by influencing the structure of a market and/or the behaviors of stakeholders in that market, which can be considered as an external market driving process. Second, Kumar et al. (2000) gave an analysis of intra-firm/internal behaviors that facilitate market driving. However, there is little evidence suggesting that market driving can lead to a competitive advantage and better corporate performance. This study attempts to uncover possible relationships between market driving strategies, competitive advantage, and firm resources through path analysis and canonical correlation coefficient analysis. This study proposed that market driving strategy should be separated into two different dimensions: market change activities, and radical value innovation activities. The findings of this study show that there are statistically positive relationships between radical value innovation activities, and firm''s performances, and competitive advantages. However, the findings surprisingly show that there is a significant negative relationship between market change activities and firm''s strategy outcomes. The results generally support the assumption that market driving strategies have a positive effect on firm competitive advantage and performance. It is concluded that market driving strategy can be a viable option while making strategic choices, and can be a complementary strategy to a market driven strategy. Firms should take both strategies in order to ensure their long-term survival. Finally, this study further provides a statically support to the proposal of Kumar et al. (2000), and likely to be generalizeable to different industries. This study also attempted to uncover the relationships between market driving strategy and sustainable competitive advantage. The findings suggest that market driving strategy fits the characteristics suggested by Barney (1991): value, rareness, inability to be imitated, and imperfect substitution. This study thus proposed that market driving strategy could be a potential source of sustainable competitive advantage from resource-based view. This reveals that a firm should still necessarily consider its ability to react current market needs to be very important as a market driving firm will eventually become a market driven firm. Only the ability to head off competition from imitation and substitution can prolong the positive effect of a market driving strategy. Further investigation of the relationships between market driving strategy and resource-based theory is suggested as a direction of future research.