How does market status affect firm's strategy mutation?

This study examines the processes connecting competitive dominance to discontinuous organizational transformation. The analysis of 18,132 firm-year observations from 2016 to 2023, utilizing the Lerner index to assess market status and ownership restructuring as an indicator of strategic transformation, demonstrates that higher market positions consistently diminish operational redundancy and improve risk absorption capacity, facilitating radical strategic changes. The study methodologically tackles endogeneity issues using instrumental variable techniques, employing lagged market status to clarify causal relationships. Results indicate that market leaders utilize price power and resource surplus to transcend path dependencies, transforming competitive insulation into strategic flexibility. The empirical validation of the dual mediating functions of redundancy reduction and risk-taking amplification demonstrates how market dominance shifts from a stabilizing anchor to a stimulus for innovation. These findings integrate resource-based and dynamic capability theories, providing policymakers with frameworks to reconcile antitrust enforcement and innovation incentives while advising enterprises to establish ambidextrous governance systems that align resource optimization with exploratory adaptation. The study proposes a framework where market leadership and strategic discontinuity function as mutually reinforcing factors that enhance sustained competitiveness in unstable global markets.