Neuenburg Market-Driving Behavior in Emerging Firms

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

E-Book, Englisch, 249 Seiten, eBook

Reihe: Entrepreneurship

Jesko-Philipp Neuenburg researches the market-driving behavior - i.e. the behavior of a company that is directed to fundamentally change the structure of the market and/or behavior of market stakeholders - in emerging firms.

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

Zielgruppe

Research

Autoren/Hrsg.

Neuenburg, Jesko-Philipp

Weitere Mitwirkende

Brettel, Prof. Dr. Malte

Inhaltsverzeichnis

1;Foreword;5
2;Preface;7
3;Table of Contents;8
4;Abbreviations;12
5;Figures;14
6;Tables;16
7;1. Introduction;18
7.1;1.1 Relevant research problem;18
7.2;1.2 Objectives of this investigation;20
7.3;1.3 Content of thesis;22
8;2. Basics of investigation;25
8.1;2.1 Emerging firms;25
8.1.1;2.1.1 Emerging firms and entrepreneurial research;25
8.1.2;2.1.2 Definition of emerging firms;26
8.1.3;2.1.3 Characteristics that differentiate emerging firms from established companies;29
8.2;2.2 Market orientation;31
8.3;2.3 Market-Driving Behavior;39
8.4;2.4 Market-Driven Behavior;55
8.5;2.5 Market-driving vs. market-driven behavior: the theoretical groundwork;64
8.5.1;2.5.1 Market-driving vs. market-driven behavior: a process perspective;65
8.5.2;2.5.2 Market-driving vs. market-driven behavior: a timing perspective;66
8.5.3;2.5.3 Market-driving behavior: a strategy perspective;68
8.5.4;2.5.4 Elements of market-driving behavior: a stakeholder perspective;73
9;3. Conceptualization of market-driving behavior in emerging firms;78
9.1;3.1 A brief review of the existing literature on market-driving behavior in emerging firms;78
9.2;3.2 Elements of market-driving behavior in emerging firms;81
9.2.1;3.2.1 Customer-driving behavior;82
9.2.2;3.2.2 Competitor-driving behavior;84
9.2.3;3.2.3 Channel-driving behavior;85
9.2.4;3.2.4 Regulator-driving behavior;86
9.2.5;3.2.5 Multiplier-driving behavior;89
9.2.6;3.2.6 Employee-driving behavior;90
9.3;3.3 Consequences of market-driving behavior;91
9.3.1;3.3.1 How market-driving behavior leads to competitive advantage;91
9.3.2;3.3.2 Impact of market-driving behavior on company performance;92
9.4;3.4 Moderators of the market-driving behavior – business performance relationship;94
9.4.1;3.4.1 Company development phase;97
9.4.2;3.4.2 Industry development stage;99
9.4.3;3.4.3 Order of market entry;100
9.4.4;3.4.4 Technology turbulence;102
9.4.5;3.4.5 Market turbulence;102
9.4.6;3.4.6 Competitive intensity;104
9.4.7;3.4.7 Regulation intensity;105
9.4.8;3.4.8 Degree of innovation;106
9.5;3.5 Overview of structural model;108
10;4. Measurement of market-driving behavior in emerging firms;111
10.1;4.1 Measurement of market-driving behavior in the extant literature;111
10.2;4.2 Design of the survey instrument;112
10.2.1;4.2.1 The market-driving behavior (MaDri) indicators;113
10.2.1.1;4.2.1.1 Customer-driving behavior;114
10.2.1.2;4.2.1.2 Competitor-driving behavior;115
10.2.1.3;4.2.1.3 Channel-driving behavior;116
10.2.1.4;4.2.1.4 Regulator-driving behavior;116
10.2.1.5;4.2.1.5 Multiplier-driving behavior;117
10.2.1.6;4.2.1.6 Employee-driving behavior;119
10.2.2;4.2.2 The market-driven behavior indicators;120
10.2.2.1;4.2.2.1 Intelligence generation;121
10.2.2.2;4.2.2.2 Intelligence dissemination;122
10.2.2.3;4.2.2.3 Responsiveness;123
10.2.3;4.2.3 The scales;124
11;5. Empirical study of market-driving behavior in emerging technology firms;125
11.1;5.1 Data collection;125
11.1.1;5.1.1 Selection of target companies for survey;125
11.1.2;5.1.2 Survey procedure;126
11.1.3;5.1.3 Sample representativeness;126
11.1.4;5.1.4 Removal of unsuitable answers;127
11.1.5;5.1.5 Data editing;127
11.1.6;5.1.6 Analysis of non-response and informant bias;128
11.2;5.2 Sample properties;129
11.2.1;5.2.1 Industries represented in the sample;129
11.2.2;5.2.2 Age, Size and Stages of sample companies;130
11.3;5.3 Data analysis;132
11.3.1;5.3.1 Specification of constructs;133
11.3.2;5.3.2 Selection of analytical method;136
11.3.3;5.3.3 Assessment of model quality;140
11.3.3.1;5.3.3.1 Quality assessment of reflective measurement models;141
11.3.3.2;5.3.3.2 Quality assessment of formative measurement models;143
11.3.3.3;5.3.3.3 Quality assessment of structural model;144
11.3.4;5.3.4 Evaluation of the measurement models: Validation of constructs;149
11.3.4.1;5.3.4.1 Reflective Constructs;149
11.3.4.2;5.3.4.2 Formative Constructs;155
11.3.5;5.3.5 Evaluation of the structural model;158
11.3.6;5.3.6 Moderators of market oriented behaviors;162
11.3.6.1;5.3.6.1 Absolute influence of market-driving behavior on firm performance;164
11.3.6.2;5.3.6.2 Relative influence of market-driving behavior vis-à-vis market-driven behavior on firm performance;165
12;6. Discussion;168
12.1;6.1 Interpretation of Results;168
12.1.1;6.1.1 The market-driving behavior construct and its dimensions;169
12.1.2;6.1.2 Performance implications of market-driving behavior;170
12.1.3;6.1.3 Consideration of environment;176
12.1.3.1;6.1.3.1 Company development phase;177
12.1.3.2;6.1.3.2 Industry development stage;181
12.1.3.3;6.1.3.3 Order of market entry;183
12.1.3.4;6.1.3.4 Technology turbulence;185
12.1.3.5;6.1.3.5 Market turbulence;186
12.1.3.6;6.1.3.6 Competitive intensity;187
12.1.3.7;6.1.3.7 Regulation intensity;188
12.1.3.8;6.1.3.8 Degree of innovation;189
12.2;6.2 Implications for entrepreneurs;192
12.3;6.3 Implications for researchers;195
12.4;6.4 Limitations of analysis and suggestions for further research;198
13;7. Summary;201
14;8. Appendix;203
14.1;8.1 Cover letter;203
14.1.1;8.1.1 Initial Invitation;203
14.1.2;8.1.2 Reminder I;204
14.1.3;8.1.3 Reminder II;205
14.2;8.2 Survey instrument;207
14.3;8.3 Statistical appendix;216
14.3.1;8.3.1 Results of structural model per moderator;216
14.3.2;8.3.2 Reliability and validity for moderator constructs;242
15;9. References;244

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.