Do Market Strategy And Nonmarket Strategy Function As Substitutes Or Complements?

The strategic choice of enterprises in emerging market has been received more and more attention by researchers.Specifically for enterprises in the transition economy,they not only face with increasingly intense market competition,but also must deal with the weak resource market,market entry barriers,harsh institutional environment and other challenges,enterprises should implement appropriate strategies to deal with these business environment.During their daily operation,enterprises will not only enact market strategy,such as research&development and marketing,to focus on providing customers with value or responding quickly to competitive situation,and to improve the core competitiveness,but also adopt nonmarket strategy,such as relational strategy.By adopting nonmarket strategy,enterprises can seek help from external stakeholders,especially government,thus obtain scarce resources and improve the legitimacy of the organization,which in turn may be converted to competitive advantage.The existing literature analyzes market strategy and nonmarket strategy as two separate strategies,focusing on how a typical strategy promotes business performance,few has done research about the interaction between the two strategies.But for enterprises in the transition economy,more often they will implement these two strategies simultaneously.However,research results are inconclusive about the effectiveness of the two strategies when enterprises enact them in a hybrid form.Researchers have obtained opposite research results.One view is that the market and nonmarket strategies presents an alternative relationship,enterprises must weigh the two to make a choice.Another view is that the two strategies are complementary to each other,enterprises can gain more benefits from market strategy if they complement it with a nonmarket strategy.Countries with a transition economy background are undergoing a logical transformation from the national political redistribution logic to the market distribution logic.In the process of gradual institution change from irregular and imperfect to normative and perfect,which strategy will be adopted by the enterprises in the trasition economy?Is it the market-oriented strategy?Or non-market-oriented strategy?Or both can be taken care of simultaneously?To answer this question,we must first clarify the relationship between the market strategy and the non-market strategy.That is,whether the two strategies complement each other or presents an alternative relationship?What impact does the hybrid strategy have on the business?This paper argues that the value of the hybrid strategy in the transition economy can be justified by considering the specific context in which the firm implements the hybrid strategy.Based on the survey of Chinese enterprises organized by the World Bank in 2012,this paper explores the effectiveness and value of the hybrid strategy under the condition of different institutional environments,the degree of industry competition faced by enterprises and the level of their own absorptive capacity.The results show that the influence of the hybrid strategy on the performance of the firm depends on different situational factors,the problem should be viewed with the idea of contingency:When the firm has strong absorptive capacity,the nonmarket strategy will form a complementary effect on the market strategy and amplify the positive impact of market oriented strategy on firm performance.But in contexts where the institutional environment is relatively poor,or enterprises face a higher level of competition in the industry,nonmarket strategy becomes counterproductive,diverting attention away from swift responses to market demands,weakening the positive impact of market oriented strategy on firm performance.By studying the mechanism of the hybrid strategy,this paper provides a new perspective on the research of market and nonmarket strategies under different situational factors,which enriches the existing research in this field.The research results can provide some inspiration for the enterprise's strategic choice making and government policy development.