From market driven to market driving

Nirmalya Kumar, Lisa Scheer and Philip Kotler

European Management Journal, 2000, vol. 18, issue 2, 129-142

Abstract: Firms are constantly exhorted to become more market driven. However, our study of 25 pioneering companies (e.g. Body Shop, IKEA, Tetra Pak) whose success has been based on radical business innovation indicates that such companies are better described as market driving. While market driven processes are excellent in generating incremental innovation, they rarely produce the type of radical innovation which underlies market driving companies. Market driving companies, who are generally new entrants into an industry, gain a more sustainable competitive advantage by delivering a leap in customer value through a unique business system. Market driving strategies entail high risk, but also offer a firm the potential to revolutionize an industry and reap vast rewards. Although established companies face four major obstacles in developing and launching radical market driving business ideas, we offer several recommendations to help established companies overcome these obstacles and become more market driving.

Date: 2000
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