Market niches as dynamic, co-created resource domains

Abstract

Competing in niches is a fundamental marketing strategy for SMEs in business-to-business markets yet how internationalizing SMEs come to compete in the niches they do is unclear. Using multiple case studies of competing firms in a single B2B industry sector, this research found that niches evolved in response to resources supplied or withdrawn by early customers, sales channels, shareholders and competitors. We show that market niches are dynamic resource domains where market actors co-create new, specialized value. SMEs may target new niches when they internationalize because they cannot access the resources needed to co-create their domestic niche or because resources are valued differently.