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University of Nebraska–Lincoln

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Collaborative Market Driving: How Peer Firms Can Develop Markets Through Collective Action

Journal(s): Journal of Marketing
Published: April 23, 2020
Author(s): Andre F. Maciel, Eileen Fischer

General Description
Although large companies often dominate entire industries, small and medium-sized firms can carve out vibrant niches in the U.S. craft beer market. These type of niches also exist in other market categories such as specialty coffee, community-supported agriculture and credit unions. Entrepreneurs can join forces to develop a new market category when they lack adequate resources to do so individually. By acting in concert, they can become a force to be reckoned with, enacting a marketplace version of the parable of David and Goliath.

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Academic Abstract
Firms often aim to develop markets as part of their long-term strategies. Conventionally, research in marketing has explained this complex process by stressing firms’ efforts to outdo their peers. While this emphasis is valuable, it overlooks the role of another major force in market evolution: collective action among peer firms. To address this oversight, this article conceptualizes “collaborative market driving,” defining it as the collective strategy in which peer firms consistently cooperate among themselves and with other actors to develop markets in ways that increase their overall competitiveness. This conceptualization includes the triggers that lead peer firms to mobilize for collective action and coalesce with other market actors; it also identifies how this coalition converts collective resources into market-driving power. These theoretical contributions, based on a multimethod analysis of the rise of U.S. craft breweries, offer an alternative course of action for firms interested in driving new markets when they lack adequate resources to do so individually.

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