Market Pioneering Capabilities and the Strategic Renewal of Organizations: Theory and Evidence

We document the process of strategic renewal of organizations through niche pioneering and new product development in a population of firms. Our main finding is that market pioneering capabilities routinized through product customization efforts lead to continued survival of firms in industries composed of niches. In addition, such capabilities shield firms operating in older technological trajectories from exit and help firms in newer technological trajectories expand. Our study, based on an unusually rich panel of the census of laser firms with self-reported measures of market pioneering capabilities, bridges the gap between inductive and large-scale studies of firms on the balance between strategies of leverage and change in high velocity markets.