This paper develops 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.
The paper employs 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.
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.
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 in order to avoid premature commercialization of innovations.
This research identifies how these viability mechanisms permit markets to emerge and survive over time. Further, it illuminates the workings of the non-linear relationship between actorlevel 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 system
Peters, L. D., Nenonen, S., Polese, F., Frow, P., & Payne, A. (2020). Viability mechanisms in market systems: prerequisites for market shaping. Journal of Business and Industrial Marketing, 35(9), 1403-1412. https://doi.org/10.1108/jbim-04-2019-0139