A management perspective on market dynamics: Stabilizing and destabilizing strategies in the US defense industry

Markets are at the same time stable and open. Economists and sociologists explain this double nature by factors of stability and factors of uncertainty. The paper adopts a management science perspective, focusing on strategic actions and reactions and using a sequential analysis. Relying on a case study of the US defense industry, it shows that a distinction has to be made between change strategies ("stabilizing" and "destabilizing" strategies) and strategies aiming at managing the risk created by these change strategies ("maintaining the stability" and "maintaining the openness" strategies). To understand market processes, the paper also shows it is important to take into account the strategies developed by three kinds of players: the customer(s), the suppliers and the regulators (antitrust authorities).