Neuenburg Market-Driving Behavior in Emerging Firms

A Study on Market-Driving Behavior, its Moderators and Performance Implications in German Emerging Technology Ventures
1. Auflage 2010
ISBN: 978-3-8349-8492-0
Verlag: Betriebswirtschaftlicher Verlag Gabler
Format: PDF
Kopierschutz: 1 - PDF Watermark

E-Book, Englisch, 249 Seiten, Web PDF

Reihe: Business and Economics

Among researchers the concept of market orientation has been broadly discussed for many years stimulated above all by the works of Kohli and Jaworski as well as Narver and Slater. These authors managed to define and operationalize the concept of market orientation in different ways and also empirically confirmed a positive performance impact of a company’s market orientation. Likewise it could be shown that for emerging firms market oriented behavior can influence between 20-25% of company success. In addition it has been researched which management measures and which aspects of a company’s culture foster this behavior in young, innovative firms. At the same time it should be noted that especially these young, innovative companies often create new markets with their innovative products and that (potential) customers only learn about the product when it is introduced to the market. It is questionable how a market oriented company can be successful in such a situation. Information cannot be generated from the customer and hence also cannot be disseminated or processed. These doubts form the basis for the idea of a “market-driving behavior“. This is defined as a company’s ability to create or influence markets. To date it is, however, unclear how such a behavior should be designed and under which circumstances it contributes to the success of young, innovative companies This is the focus area of this dissertation by Jesko Neuenburg. Its objective is to research the so called market driving behavior (MDB). Mr.

Zielgruppe

Research

Autoren/Hrsg.

Neuenburg, Jesko-Philipp

Weitere Mitwirkende

Brettel, Prof. Dr. Malte

Inhaltsverzeichnis

Basics of investigation.- Conceptualization of market-driving behavior in emerging firms.- Measurement of market-driving behavior in emerging firms.- Empirical study of market-driving behavior in emerging technology firms.- Discussion.- Summary.

Leseproben

1. Introduction (p. 1)

“The reasonable man adapts himself to the world, the unreasonable one persists in trying to adapt the world to himself. Therefore, all progress depends on the unreasonable man.” (George Bernard Shaw)

This chapter – which is divided into three short sections – will introduce the topic and research problem of this thesis, lay out the objectives for this work and structure the contents of the following chapters.

1.1 Relevant research problem

The concept of market orientation has received significant attention from researchers and practitioners alike since the early 1990s. This has been the case for established companies as well as for emerging firms. Two schools of thought have developed with regard to the two approaches to market orientation. The first one - which has been considerably more researched – is mostly referred to as the “market-driven” approach to market orientation which implies that “[…] businesses seek to understand customers’ expressed and latent needs, and develop superior solutions to those needs”.

The second one - labeled as the “market-driving” approach – on the other hand involves “a firm’s ability to lead fundamental changes in the evolution of industry conditions by influencing the value creation process at the product, market or industry levels.” This approach, however, is comparably underdeveloped in the existing literature. The first conceptualizations of market-driving strategies and behavior for established companies have been provided by Kumar et al. (2000) and Jaworski et al. (2000).

However, so far there has been no research regarding the adaptation and fine-tuning of that concept for emerging firms. Because emerging firms differ from established companies in various dimensions8 this appears to be a necessary step in order to understand and apply the market-driving concept in the context of entrepreneurship and new venture creation.

In that process it will be vital to understand the cause-effect relationships, antecedents, and consequences of market-driving behavior in emerging firms. Open questions include under what circumstances and in which environment emerging firms benefit from a market-driving strategy, what capabilities emerging firms need to reap those benefits, how an emerging firm actually “drives” a market, customer behavior, competitor actions, channel configuration or regulators, what the key success factors are and which impact can be generated by market-driving behavior.

Furthermore no generally accepted measurement instrument for market-driving behavior has been developed to date despite initial attempts in that direction. Without such a measurement instrument, however, there is no basis for further in-depth investigations on the topic which can be used as a reference point by later research endeavors. Questions on this issue arise around two problem complexes - construction of the measurement instrument and validity for the emerging firm context.

It is important to identify the key variables that determine the level of market-driving behavior, which scale items capture these variables and whether the scale differs between established companies and emerging firms. Finally, existing empirical research on market-driving behavior and strategies – which is in the very early stages – has been directed towards established companies and was predominantly case-based.

In order to empirically validate the conceptual findings about market-driving behavior of emerging firms it is necessary to conduct statistical analyses on larger samples of research objects and to investigate emerging firms as opposed to large, established firms. This doctoral dissertation contributes in the following way: it will add to the theoretical discussion of market-driving behavior by integrating it into the larger context of market orientation and advance the empirical investigation of marketdriving behavior in emerging firms by developing a measurement scale and investigate its impact on firm performance in a variety of environmental scenarios.

Über Autor(innen)

Dr. Jesko-Philipp Neuenburg wrote this dissertation under Prof. Malte Brettel’s supervision at the WIN chair of the RWTH Aachen.