Positioning among Organizations in a Population: Moves between Market Segments and the Evolution of Industry Structure

Abstract

We develop a framework for defining the boundaries of within-population market segments, differentiated based on type and level of resources. Using this framework, we propose a theory of the moves between market segments of all firms in an organizational population across its evolution. Focusing on commensalistic interdependence within a segment, we adapt density dependence theory to predict that processes of mutualism and competition operate concurrently, even across high counts of density, and affect firms' propensity to desert their segment. Analyses of moves between market segments by firms in the U.S. auto industry between 1895 and 1981 confirm our predictions and suggest the operation of a basic ecological process that shapes the evolution of population structure.