First mover or follower advantage in a dynamic market.
Item
-
Title
-
First mover or follower advantage in a dynamic market.
-
Identifier
-
AAI9530849
-
identifier
-
9530849
-
Creator
-
Abel, Ivan Charles.
-
Contributor
-
Adviser: Yoshihiro Tsurumi
-
Date
-
1995
-
Language
-
English
-
Publisher
-
City University of New York.
-
Subject
-
Business Administration, General | Business Administration, Marketing | Business Administration, Management
-
Abstract
-
Timing of market entry is one of the most critical decisions that firms have to make. The basic question of whether first movers are more successful than followers still remains unanswered. This study examines three fundamental entry order questions: (1) Do first movers establish a long run dominant market position? (2) If not, what is the entry order of the firms which do so? (3) When and why do some first entrants succeed while others fail?;Fifty-two consumer and industrial product categories were analyzed in two time periods. The results show that for the first entrants only 7.7% remained market leaders and the average market share was only 4.3%.;Furthermore, it was found that the relationship between entry order and market dominance is not that of decline with later entry as reported in earlier studies, but curvilinear--lowest for first entrants and pioneers, highest for early followers and somewhat lower for late entrants. 97% of the firms that dominated the markets entered as followers, on an average 9.3 years after the first mover. Neither the organizational nor innovation characteristics influenced first entrants success.;Firms most likely to pioneer a new product category were small industry newcomers (46.1%), but the firm most likely to dominate the new category were large incumbents (59.5%). These results challenge the established view that pioneering by industry newcomers leads to leadership turnover in favor of the pioneering newcomers. The newcomers that gained industry prominence entered as followers.;Neither the endogeneity nor the exogeneity arguments of the first mover advantage theory were found valid simply because first entrants did not succeed. In over 80% of the product categories the reputation of pioneer was usually bestowed upon one or more successful followers, some entering more than two decades after the first mover. True pioneers were a mere footnote in the annals of the product history. Major reasons for first entrant failure were market and technological uncertainties in the introductory stage and the intense competition that ensued after the market was proven. In order to maintain market dominance, the first entrant had to replicate complementary capabilities of the strongest follower. That proved far more difficult than for the followers to imitate and improve the first mover's product.
-
Type
-
dissertation
-
Source
-
PQT Legacy CUNY.xlsx
-
degree
-
Ph.D.
