Viability mechanisms in market systems: prerequisites for market shaping
Journal of Business & Industrial Marketing
ISSN: 0885-8624
Article publication date: 21 May 2020
Issue publication date: 21 May 2020
Abstract
Purpose
This paper aims to develop a conceptual framework based on the identification and examination of the mechanisms (termed “viability mechanisms”) under which market-shaping activities yield the emergence of a viable market: one able to adapt to the changing environment over time while remaining stable enough for actors to benefit from it.
Design/methodology/approach
This paper uses extant literature to build a conceptual framework identifying viability mechanisms for market shaping and a case illustration examining how a viable market for Finnish timber high-rise buildings was created. The case exemplifies how the identified viability mechanisms are practically manifested through proactive market shaping.
Findings
The proposed conceptual framework incorporates four viability mechanisms identified in the extant literature: presence of dissipative structures, consonance among system elements, resonance among system elements and reinforcing and balancing feedback loops. It illustrates how these mechanisms are manifested in a contemporary case setting resulting in a viable market.
Practical implications
First, firms and other market-shaping organizations should look for, or themselves foster, viability mechanisms within their market-shaping strategies. Second, as failure rates in innovation are extremely high, managers should seek to identify or influence viability mechanisms to avoid premature commercialization of innovations.
Originality/value
This study identifies how these viability mechanisms permit markets to emerge and survive over time. Further, it illuminates the workings of the non-linear relationship between actor-level market-shaping actions and system-level market changes. As such, it provides a “missing link” to the scholarly and managerial discourse on market-shaping strategies. Unlike much extant market-shaping literature, this study draws substantively on the systems literature.
Keywords
Acknowledgements
This research is partially funded by a Marsden grant (UOA1333) from the Royal Society of New Zealand.
Citation
Peters, L.D., Nenonen, S., Polese, F., Frow, P. and Payne, A. (2020), "Viability mechanisms in market systems: prerequisites for market shaping", Journal of Business & Industrial Marketing, Vol. 35 No. 9, pp. 1403-1412. https://doi.org/10.1108/JBIM-04-2019-0139
Publisher
:Emerald Publishing Limited
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