In the earlier literature the importance of public policies and regulatory changes to firm performance and competitive position has been well established (e.g., Bonardi, 2004). However, little research has been done on the dynamics of this relationship. In this paper, we examine how and why regulatory changes can affect on the evolution of market and nonmarket strategies of a firm. We use a longitudinal case study on Finnish retail industry to illustrate the interactions between regulatory change, strategic responses and firm (...) performance. (shrink)