Nonmarket and market strategies, strategic uncertainty and strategic capabilities

CITATION

Parnell, J. (2018). Nonmarket and market strategies, strategic uncertainty and strategic capabilities. Management Research Review, 41(2), 252–274

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ABSTRACT
Purpose – Amidst rapid development in emerging economies, greater emphasis on public–private
partnerships and a more complex regulatory environment, nonmarket strategy (NMS) is now widely viewed
as a key component of a firm’s overall strategy. This paper aims to investigate how nonmarket and market
strategies are influenced by strategic uncertainties and capabilities and ultimately drive firm performance.
Design/methodology/approach – A survey addressing strategic uncertainties, capabilities, NMS and
market strategy and firm performance was administered online to 193 practicing managers in the USA.
Measures for competitive strategy (i.e. cost leadership and differentiation), NMS, management and marketing
capabilities, competitive and technology uncertainties and firm performance were adopted from or based on
previous work. Hypotheses were tested via SmartPLS.
Findings – Emphasis on NMS was linked to high marketing capability, high competitive uncertainty and
high technology uncertainty. Cost leaders were more likely than differentiators to emphasize on NMS,
although all three strategies were positive drivers of performance. NMS appears to be viewed as a part of an
integrated strategic approach by managers in many organizations.
Research limitations/implications – The sample included mangers in multiple industries. Self-typing
scales were used to assess strategic emphasis and firm performance.
Practical implications – Emphasis on NMS can promote firm performance, but the relationship is
complex. Strategic managers should align the NMS with organizational capabilities and a market-oriented
strategy appropriate for the firm.
Originality/value – This paper provides empirical support for a model linking select strategic
uncertainties, capabilities, market strategy and NMS and firm performance. It supports NMS as a key
performance driver, but with links to uncertainties and capabilities that differ from those of market strategies


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