Market-Driven Versus Driving Markets

Abstract

The purpose of this article is to discuss two approaches to being market oriented—a market-driven approach and a driving-markets approach. Market driven refers to a business orientation that is based on understanding and reacting to the preferences and behaviors of players within a given market structure. Driving markets, on the other hand, implies influencing the structure of the market and/or the behavior(s) of market players in a direction that enhances the competitive position of the business. There are three generic ways of changing the structure of a market: (1) eliminating players in a market (deconstruction approach), (2) building a new or modified set of players in a market (construction approach), and (3) changing the functions performed by players (functional modification approach). Market behavior can be modified directly or, alternatively, indirectly by changing the mind-set of market players (e.g., customers, competitors, and other stakeholders).