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Related Concept Videos

Application of Differentiation to Business01:29

Application of Differentiation to Business

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Calculus offers essential techniques for businesses seeking to optimize pricing strategies and revenue. In this case, a bakery wants to determine the ideal price and daily sales volume to maximize revenue. By modeling how changes in price affect demand and revenue, the bakery can apply calculus to make data-driven decisions.The demand function relates the price per cupcake to the number of cupcakes sold and captures how lower prices increase sales. Based on market data, the demand function can...
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A Practice Perspective on Market Evolution: How Craft and Commercial Coffee Firms Expand Practices and Develop

Pierre-Yann Dolbec, Zeynep Arsel, Aya Aboelenien

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    This study introduces practice expansion as a key mechanism driving market evolution, fueled by institutional complexity. It reveals how firm interactions and evolving practices increase product diversity and market meaning.

    Keywords:
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    Area of Science:

    • Business Strategy
    • Market Dynamics
    • Organizational Theory

    Background:

    • Market evolution is a critical business inquiry.
    • Understanding the drivers of market change is essential for strategic planning.
    • Existing theories offer limited insight into the micro-level processes of market evolution.

    Purpose of the Study:

    • To introduce and theorize the mechanism of practice expansion.
    • To explain how institutional complexity fosters market evolution.
    • To identify firm typologies and their roles in market evolution.

    Main Methods:

    • Qualitative analysis of a large dataset from the coffee market.
    • Integration of institutional logics and resource partitioning theories.
    • Development of a two-by-two firm typology (craft/commercial, generalist/specialist).

    Main Results:

    • Identified three mechanisms of practice expansion: elaboration, translation, and transformation.
    • Demonstrated how practice expansion increases product diversity, broadens skills, and enriches market meaning.
    • Showcased the interplay between firm types and institutional complexity in driving evolution.

    Conclusions:

    • Practice expansion is a novel theoretical mechanism explaining market evolution.
    • Firm interactions and evolving practices are crucial for market development.
    • The theory offers strategic implications for firms navigating institutional complexity and market change.