Exploring Market Creation by Entrepreneurs in Sweden : How Value Innovation Fosters the Creation of New Markets

Abstract: As new markets continuously emerge, increasing academic attention has been devoted to identifying what factors predominantly foster this process. Notably, scholars have coupled market creation with value-creating innovations; new markets emerge due to generation of novel customer value. Blue Ocean Strategy is a prominent approach to such market creation incentives, centring around the implementation of value innovation. However, exploration of this approach has been relatively overlooked in previous research. Extant literature has, instead, primarily acknowledged marketing incentives as the major facilitating factor of new markets, referring to how solutions need to be aptly communicated to gain stakeholders. In addition, technology development is considered by scholars to have a great impact on the creation of new markets, on accounts of breakthrough inventions having disrupted and dismantled preceding industries. The purpose of this study is thus to fill the apparent research gap by investigating how value innovation enables entrepreneurs to create new markets. Although startups are pertinent to the notion of innovative solutions that lead to new markets, entrepreneurs’ approach to market creation has not been extensively investigated. Hence, becoming an applicable context for the research purpose. In order to collect empirical data, a qualitative research approach was undertaken, where seven interviews were conducted with respondents from different Swedish startup companies. Participating companies originate from a variety of industries and shared experiences from their respective innovation processes, which subsequently facilitated insightful data, applicable to the purpose. Findings revealed that value innovation enables entrepreneurs to create new markets as its implementation removes the challenge of competing with incumbents, allowing the startup to go beyond the boundaries of the traditional industry. Ultimately, the collected data could not support the notion of value innovation as an exclusive approach to market creation. Nevertheless, the role of value innovation as a significant factor in the process cannot be entirely undermined as findings indicated that its implementation prominently alleviates market creation.