Introduction

Abstract

This thesis deals with industrial dynamics and market evolution in the mutual fund industry. Both these concepts are rooted in the notion of industry architecture. Industry architecture can be loosly described as the combination of industry structure (both in terms of fragmentation, as well as in terms of the boundaries of the firms in the market), channels of interaction or relation (across the bounded firm segments and between firms) and the nature of these interactions. Structures and relations are not stable concepts. So change in regulation, in demand, in technology or in riskiness may easily affect previously existing configurations. These adjustments are referred to when using the term “ industrial dynamics”. Industrial dynamics analyzes the forces and directions of changes in industry architecture and may lead to the evolution of (new intermediary) markets wherever boundaries of firms change or new gaps open. The theory and methodology to cope with such tasks is very broad in scope and ranges from concepts that are rooted in classical micro economics to research strands that draw from sociology and the management literature. Industry dynamics and market evolution are thus key concepts that can be used to discuss and assess the implications of competitive pressure in a holistic way, and serve as a strong tool to point towards emerging strategic options.