Proactive market shaping - Actors, activities and behaviors
This project overall aim is to unravel how organizations can shape markets. In both research and practice, it is possible to discern a move away from the dominant market metaphor that emphasizes markets as pre-existing towards markets as ongoing processes that actors can influence, and therefore shape, through various activities.
The importance of such an activity approach for understanding how markets are being shaped is being emphasized in contemporary research and is also propelled into focus as new value propositions, e.g. built around proactive business models, emerges and needs to be anchored in a market. Proactive behavior is key to market shaping and is based around organizational activities with the purpose of improving a current, or expected future, situation.
Our research contribution – understanding market shaping as well as linking market shaping and proactivity – holds great potential to create new knowledge and theoretical frameworks, as well as to inform practice, in terms of how to understand and manage market shaping processes.
The present research aims at pushing the field forward by developing a market shaping framework providing insights into the content, actor roles, as well as the activities related to market shaping. The research also aims to develop a framework focusing on strategic types describing various archetypical proactive market shaping behaviors.
Final report
Aim and starting points
The project set out to unravel how organizations can shape markets with three research questions. To guide us three research questions were formulated:
1) Understanding the role of different market actors, and their interactions, as they implement market shaping strategies,
2) Focusing on the proactive market shaping activities of the identified market actors, enabling a deeper understanding of how markets emerge and evolve as actors shape them through these proactive activities, and
3) Developing a conceptual framework of strategic types, outlining archetypical market shaping strategies.
In our research we state that a market-shaping perspective emphasizes markets as ongoing processes, to be influenced and shaped by market actors through various firm-initiated activities as well as through the coordinated activities of multiple actors in concert. Furthermore, we contend that shaping markets is challenging, requires particular resources and strategies, and that there are different types of shaping processes available for actors depending on their market shaping agendas.
Another key starting point for us was that firms need to act in a more proactive manner in how they approach markets in order to become, or remain, successful on contemporary markets. In this, it is possible for firms to be proactive and shape markets in different ways and market shaping can have different goals depending on contextual factors and on firm strategy. Finally, market shaping, from our point of view, is a conscious choice, and strategy, that can drive firm performance over time.
The overarching project had a broader aim meaning that we approached proactive market shaping from different perspectives through a number of elaborated research questions. Besides generating new knowledge and the associated research contributions, we have been able to pinpoint key aspects that needs further elaboration. For example, the need to understand the existence of different shaping roles on a market as well as the importance of increasing the understanding of how market shaping strategies can be implemented in various firms, as well as in different market systems with different consequences, are key issues that need further study. We can also conclude that market shaping processes can take very different forms depending on objectives but also depending on available resources and tools and this is also an interesting avenue for future research.
A short note on the research process
The project was based on the premise that successful market-shaping requires purposive action on multiple levels. It follows that both in-depth firm-, as well as market-level, analyses were needed to properly unravel and understand how markets can be shaped. As market shaping is a complex and emerging process, a qualitative, case-oriented, approach was deemed appropriate. This means, among other things, that data collection primarily was based on interviews and work-shops with key stakeholders, at both the firm and market level. Through this we developed in-depth cases for multiple firms, in different markets, to elucidate and unravel multiple market shaping processes within different contextual situations. This enabled us to forward a number of interesting findings.
Three key contributions
The project contributes primarily to the market-shaping literature, but also to the industrial marketing discipline as well as, to a certain extent, industry transition studies, through three major contributions:
1. We identify four market-shaping strategies – market disruption, market widening, market maintenance and market reduction - and their related activities that enable a focal market actor to work towards specific market outcomes. The conceptual framework provides firms with a tool for choosing specific market-shaping strategies depending on their market-shaping intention (offensive/defensive) and perception of a market's stability (stable/unstable). Accordingly, and in line with market-shaping literature, the four market-shaping strategies enable a firm to widen, reduce, maintain, or disrupt a market. This is also one of the first academic strategic conceptualizations of market shaping, linking the market shaping discourse to a broader market strategic perspective.
2. We put forward a generic framework aimed at proactive market strategies – habitual, visionary, adaptive and ambidextrous - and how these can manifest in firms as they, among other things, attempt to shape a market. In this we also propose a more nuanced definition, focusing future-oriented and change inducing characteristics, of what proactivity actually entails in a market strategic context.
3. We explore the different roles, and interactions, market actors can assume in market-shaping processes by investigating the shaping of a completely new market – the Swedish market for liquefied gas for the heavy transport sector. In an abductive theorizing process, we develop a typology of market-shaping roles by integrating the extant market-shaping research with stakeholder and engagement theory. Furthermore, by merging our work on market-shaping with transition studies, we also outline a framework that describes the shaping of sustainable markets. The framework comprises three critical processes: enabling exchange practices, proving the system and constructing the narrative.
In terms of practical use, one interesting example is our work emanating from the previously mentioned study of the gas market in Sweden as it provides suggestions and implications for the further development of that market for managers, firms as well as regarding policy. Also our proposed framework should be valuable for managers attempting to shape markets.
Dissemination of research
As for the dissemination of our research, we firstly point to a number of articles published (see list of references) and conference presentations (five international conferences). Conference presentations were, as a consequence of the pandemic, not as numerous as planned but we did participate in digital conferences to the extent that was possible. We also worked actively with including results, firm examples, as well as publications in our teaching activities. Our research has furthermore been included in marketing textbooks that the project team have (co-)authored. Furthermore, we have held seminars with multiple B2B firms as well as presented findings at various industry-oriented workshops in order to disseminate our findings to a broader audience outside of the academic world. For example, we have performed industry workshops discussing market shaping and diffusing findings regarding the (bio)gas market and in the high-tech sector.
Project members have further conducted workshops as well as presentations for several startup and innovation hubs (e.g. Swedish Scale-Ups) at Linköping science park (e.g. Market-Shaping in a COVID-19-World). This has enabled us to both gain data but simultaneously also provided us with the ability to communicate research findings to firms working at the front-end with market shaping in diverse and emerging markets.
In terms of cooperation with other researchers and research groups, the pandemic made this less elaborated than planned and expected. We have however had interactions and cooperation with Oulu University around early market shaping processes (in what we call the fuzzy front end of market shaping), and with Stockholm School of Economics around a meta-analysis of market shaping processes. We furthermore held discussions with Prof C-F Helgesson at Uppsala University in the early parts of the project to get valuable input as to the overall project aim and to develop the notion of what markets can be. Finally, we have also conducted digital meetings with the University of Auckland and the MASHIN-organization (an international cooperation of academics interested in market shaping). This also included taking part of and presenting paper at the digital MASHIN-conference in 2020.
The project set out to unravel how organizations can shape markets with three research questions. To guide us three research questions were formulated:
1) Understanding the role of different market actors, and their interactions, as they implement market shaping strategies,
2) Focusing on the proactive market shaping activities of the identified market actors, enabling a deeper understanding of how markets emerge and evolve as actors shape them through these proactive activities, and
3) Developing a conceptual framework of strategic types, outlining archetypical market shaping strategies.
In our research we state that a market-shaping perspective emphasizes markets as ongoing processes, to be influenced and shaped by market actors through various firm-initiated activities as well as through the coordinated activities of multiple actors in concert. Furthermore, we contend that shaping markets is challenging, requires particular resources and strategies, and that there are different types of shaping processes available for actors depending on their market shaping agendas.
Another key starting point for us was that firms need to act in a more proactive manner in how they approach markets in order to become, or remain, successful on contemporary markets. In this, it is possible for firms to be proactive and shape markets in different ways and market shaping can have different goals depending on contextual factors and on firm strategy. Finally, market shaping, from our point of view, is a conscious choice, and strategy, that can drive firm performance over time.
The overarching project had a broader aim meaning that we approached proactive market shaping from different perspectives through a number of elaborated research questions. Besides generating new knowledge and the associated research contributions, we have been able to pinpoint key aspects that needs further elaboration. For example, the need to understand the existence of different shaping roles on a market as well as the importance of increasing the understanding of how market shaping strategies can be implemented in various firms, as well as in different market systems with different consequences, are key issues that need further study. We can also conclude that market shaping processes can take very different forms depending on objectives but also depending on available resources and tools and this is also an interesting avenue for future research.
A short note on the research process
The project was based on the premise that successful market-shaping requires purposive action on multiple levels. It follows that both in-depth firm-, as well as market-level, analyses were needed to properly unravel and understand how markets can be shaped. As market shaping is a complex and emerging process, a qualitative, case-oriented, approach was deemed appropriate. This means, among other things, that data collection primarily was based on interviews and work-shops with key stakeholders, at both the firm and market level. Through this we developed in-depth cases for multiple firms, in different markets, to elucidate and unravel multiple market shaping processes within different contextual situations. This enabled us to forward a number of interesting findings.
Three key contributions
The project contributes primarily to the market-shaping literature, but also to the industrial marketing discipline as well as, to a certain extent, industry transition studies, through three major contributions:
1. We identify four market-shaping strategies – market disruption, market widening, market maintenance and market reduction - and their related activities that enable a focal market actor to work towards specific market outcomes. The conceptual framework provides firms with a tool for choosing specific market-shaping strategies depending on their market-shaping intention (offensive/defensive) and perception of a market's stability (stable/unstable). Accordingly, and in line with market-shaping literature, the four market-shaping strategies enable a firm to widen, reduce, maintain, or disrupt a market. This is also one of the first academic strategic conceptualizations of market shaping, linking the market shaping discourse to a broader market strategic perspective.
2. We put forward a generic framework aimed at proactive market strategies – habitual, visionary, adaptive and ambidextrous - and how these can manifest in firms as they, among other things, attempt to shape a market. In this we also propose a more nuanced definition, focusing future-oriented and change inducing characteristics, of what proactivity actually entails in a market strategic context.
3. We explore the different roles, and interactions, market actors can assume in market-shaping processes by investigating the shaping of a completely new market – the Swedish market for liquefied gas for the heavy transport sector. In an abductive theorizing process, we develop a typology of market-shaping roles by integrating the extant market-shaping research with stakeholder and engagement theory. Furthermore, by merging our work on market-shaping with transition studies, we also outline a framework that describes the shaping of sustainable markets. The framework comprises three critical processes: enabling exchange practices, proving the system and constructing the narrative.
In terms of practical use, one interesting example is our work emanating from the previously mentioned study of the gas market in Sweden as it provides suggestions and implications for the further development of that market for managers, firms as well as regarding policy. Also our proposed framework should be valuable for managers attempting to shape markets.
Dissemination of research
As for the dissemination of our research, we firstly point to a number of articles published (see list of references) and conference presentations (five international conferences). Conference presentations were, as a consequence of the pandemic, not as numerous as planned but we did participate in digital conferences to the extent that was possible. We also worked actively with including results, firm examples, as well as publications in our teaching activities. Our research has furthermore been included in marketing textbooks that the project team have (co-)authored. Furthermore, we have held seminars with multiple B2B firms as well as presented findings at various industry-oriented workshops in order to disseminate our findings to a broader audience outside of the academic world. For example, we have performed industry workshops discussing market shaping and diffusing findings regarding the (bio)gas market and in the high-tech sector.
Project members have further conducted workshops as well as presentations for several startup and innovation hubs (e.g. Swedish Scale-Ups) at Linköping science park (e.g. Market-Shaping in a COVID-19-World). This has enabled us to both gain data but simultaneously also provided us with the ability to communicate research findings to firms working at the front-end with market shaping in diverse and emerging markets.
In terms of cooperation with other researchers and research groups, the pandemic made this less elaborated than planned and expected. We have however had interactions and cooperation with Oulu University around early market shaping processes (in what we call the fuzzy front end of market shaping), and with Stockholm School of Economics around a meta-analysis of market shaping processes. We furthermore held discussions with Prof C-F Helgesson at Uppsala University in the early parts of the project to get valuable input as to the overall project aim and to develop the notion of what markets can be. Finally, we have also conducted digital meetings with the University of Auckland and the MASHIN-organization (an international cooperation of academics interested in market shaping). This also included taking part of and presenting paper at the digital MASHIN-conference in 2020.