Why shape a market? Empirical evidence on the prominent firm-level and market-level outcomes of market-driving strategy

Market-driving strategy (MDS) is defined as influencing the market structure and/or the market players’ behavior in a direction that reinforces a firm’s competitive edge.
Hitherto, limited evidence exists regarding its consequences, while innovation is of profound importance for MDS. The objectives of this project are to identify: (1) the main firm-level and market-level outcomes of MDS, (2) mediating mechanisms among those outcomes, and (3) the influence of radical and incremental product innovation
capabilities on MDS. A mixed-methods research design is applied, grounded in three complementary studies (a qualitative study [27 in-depth interviews], an online survey
[241 participants], and a follow-up online survey [101 participants]). Findings suggest that: (a) the firm-level outcomes of MDS are financial and customer performance,
organizational reputation, and sustained competitive advantage; (b) radical and incremental product innovation trigger MDS; (c) incremental innovation and organizational reputation are positively related to financial performance; and (d) MDS enhances market change.