80 The Marketing Book
The new analytics: resource advantage, co-evolution and agent-based modelling
Earlier on in this chapter we identified a number
of key characteristics of a competitive market
which determine the effectiveness of any spe-
cific strategic analysis, in particular: the hetero-
genity of demand; the interaction between cus-
tomer choices and producer offerings; and the
degree to which both producers and customers
are active agents in this process. More recently,
various new analytical approaches have given
us new and different ways to address these cen-
tral issues.
First, Hunt (2000a) has argued that the tra-
ditional resource-based view of the firm is so
dominated by a supply side perspective that a
more comprehensive theoretical approach,
which he labels ‘resource advantage’, is
required.
There are some concerns, however, as to
whether Hunt’s framework actually provides
the most effective way of incorporating hetero-
geneity of demand (Wensley, 2002a), particu-
larly in the context of the evolution of marketing
structure. For instance, one of the most estab-
lished issues in the nature of a market structure
is what Wroe Alderson referred to as the sequen-
tial processes of ‘sorting’ between supplier offer-
ings in order to ‘match’ specific portfolios to cus-
tomer demands, yet Hunt (2000b) himself
observes that so far he is unclear how this might
be incorporated within his framework.
At best, therefore, it remains an open ques-
tion how far the developments proposed by
Hunt will help us to understand not only a static
view of market demand, but even more a
dynamic and evolving one, although it does pro-
vide a very useful perspective on the nature of
strategic choices for the individual firm or busi-
ness unit.
Second, there have also been interesting
developments in empirical studies of co-evolu-
tion, but unfortunately most of these so far have
focused on process between organizations, as
Lewin and Volberda (1999) note:
However, studies of simultaneous evolution or
co-evolution of organizations and their environ-
ments are still rare. We define co-evolution as the
joint outcome of managerial intentionality, envi-
ronment, and institutional effects. Co-evolution
assumes that change may occur in all interacting
populations of organizations. Change can be
driven by direct interactions and feedback from
the rest of the system. In other words, change can
be recursive and need not be an outcome of
either managerial adaptation or environmental
selection but rather the joint outcome of manage-
rial intentionality and environmental effects.
As an exception they also note the Galunic and
Eisenhardt (1996) study on selection and adap-
tation at the intra-corporate level of analysis,
which used charter changes to align and realign
the competencies of various divisions with co-
evolving markets and opportunities. However,
the model adopted for the process of market
evolution remained a simple three-stage life
cycle one: start-up, growth and maturity. They
found that, broadly speaking, the process of
charter changes, which equate with the agreed
domain of any division’s activity, could be seen
as one which was based on selecting the suc-
cesses from a portfolio of start-ups, the reinforc-
ing focus and finally requiring disposals as the
particular market opportunity went through the
three stages.
From a market strategy perspective, how-
ever, it is noteworthy that even those few studies
which attempt to model the nature of market
evolution specifically, rather than treat it more as
a backcloth upon which other sociological and
economic processes take place, tend to represent
the actual process in very limited ways. Only in
the resource partitioning approach (Carroll and
Swaminathan, 1992) do we perhaps see the
direct opportunities for a more complex model
of market development which represents both
its continuity, in the sense that one reasonably
expects cycles of competitive imitation followed
by the emergence of new forms and market posi-
tions for competition, and its indeterminacy, in