First come, first served: How market and non-market actions influence pioneer market share

This study examines the relationship between the erosion of first-mover advantages and the competitive behavior of pioneer and follower firms in a service industry—in this case, the European mobile telecommunications industry. The research analyzes the role of market actions related to innovation, pricing and promotion, and non-market actions related to judicial issues. The study finds that first movers enjoy a sustainable market share advantage in this service industry, but that this advantage depends on the type of actions taken by pioneers and followers. Specifically, followers that take more market actions than the pioneer are not able to erode the first-mover's advantage. However, followers taking more non-market actions - such as litigation and complaints - are successful at taking market share from the pioneer.     

Innovation and imitation effects in the mobile telecommunication service market

This study investigates adoption patterns of the first mover and the followers in the Information and Communication Technology industry. The continuous behavior of adopters over time is difficult to analyze and most previous studies were cross-sectional rather than longitudinal. In order to overcome these limitations, a mathematical diffusion model with verified official time-series data is used to analytically investigate the impact of both innovation and imitation effects on the mobile phone adoption in South Korea. The results showed that the imitation effect of the first mover was larger than those of the followers in the mature mobile telecommunication services market in South Korea. The innovation effect of the follower was larger than that of the first mover, and the innovation effect was larger than the imitation effect in the market.     

The erosion of pioneer advantage in the European mobile telecommunications industry

This paper studies first-mover advantage in the mobile telecommunications services industry. There are very few empirical studies of pioneer advantage in service industries, possibly because of the difficulty of building competitive advantages in an industry where innovations cannot be protected and competitive actions can be easily imitated. The empirical research was carried out using data from a sample of European mobile telecommunications firms from 1993 to 2005. The findings indicate that an order of entry advantage does exist, but that this advantage diminishes with time in competition. Regarding the impact of the main sources of pioneering advantages, the results show that it is harder for follower firms to erode first-mover advantages when the pioneer has prior experience in the industry and when there are two pioneers instead of one. Lastly, number portability between different operators was found to damage the competitive position of the pioneer firms.     

Foreign Direct Investment in China

Summary

China has attracted the second largest amount of foreign direct investment in the world each year since 1993. Hundreds of thousands of foreign-invested enterprises are in operation in China. However, what drive the success or cause the failure of foreign investments is still not well understood. This paper critically examines one success factor, i.e., the importance of timing of marketing entry into China. It begins with a brief review of the literature on first-mover advantages and the recent empirical research. It then attempts to theorize on why timing of market entry matters in the context of foreign direct investment. Apart from drawing upon the four recent studies in this area, this paper focuses on the auto industry in China and the case of Volkswagen to illustrate the importance of early entry into an overseas market. It calls for foreign investors to seize the first-wave opportunities when the door is opened a certain sector. It pays in the long run both in terms of the market share position and profitability.     

Declining first-mover advantage in mobile telecommunications markets

First-mover advantage may be more remarkable in the inherently oligopolistic mobile telecommunications market. This study evaluates the impact of market experience and competition on market share and profitability in mobile markets. Specifically, the study estimates regression equations for market share and earnings before interest, tax, depreciation, and amortization (EBITDA) service margin as a proxy for profitability, relying on a panel of mobile network operator (MNO) data from 27 Organisation for Economic Co-operation and Development member states for the period 1998–2009. The empirical results demonstrate that market experience (relative time in the market) exerted a clearly positive effect on the market share and the EBITDA service margin for MNOs. On the other hand, this first-mover advantage declines over time with accumulated competition experience, especially in the latter half of the 2000s.     

An empirical study about the impacts of China's accession to the WTO on the telecommunications industry in China

Post‐China's accession to the World Trade Organization (WTO), China's telecommunication industry now needs to face a much stronger competition in a relatively open market that has a number of diverse rivalries. There are specific benefits and risks associated with both domestic telecommunication (telecom) companies and foreign investors in the telecommunication or information technology area. To meet with these new challenges and take advantage of the competitive, strategic advantages to penetrate the market, both China's telecom industry and foreign investors must understand the impacts of China's accession to the WTO on its telecommunication industry and hence make the necessary adjustments and/or implementation improvements. In specific, we carefully examine the impacts such as prices, quality, and local protectionism in this article. We draw the findings based on the data collected from a survey and the resulting statistic analysis.     

When to lead or follow? It depends

Existing studies of entry strategy attribute sustained pioneer advantages to the pioneer's ability to erect barriers that impede the entry of potential competitors. Because effective entry barriers imply industry concentration, the entry-barrier explanation of sustained pioneer advantage suggests that pioneers in concentrated industries will experience superior mature-stage performance. This paper tests this hypothesis by controlling for industry concentration and analyzing the impact of entry strategy on the mature-stage firm's market share, perceived relative product quality, relative product-line breadth, relative price, and relative direct costs. The analysis suggests that the presence of effective barriers-to-entry significantly affects the performance poineers in both consumer- and industrial-goods industries. Moreover, the extent to which pioneers receive an incremental share advantage over early followers depends on both industry type and end-user purchase amounts.     

Is there a negative relationship between the order-of-brand entry and market share?

The order-of-entry effect has been continually examined over the last quarter century, leading to the generalization that a negative relationship exists between the order-of-brand entry and market share. As the number of followers that become market share leaders and the conceptual arguments against this assumption grow, the nonexistence of this negative relationship has yet to be empirically demonstrated. This research challenges the generalization by examining market conditions in which a brand’s entry position has exerted a positive effect on its market share potential, compared with an earlier entry position. Using order-of-entry models consistent with extant literature, an empirical analysis of consumer scanner data across 375 followers reveals two situations that challenge the prediction of a negative relationship between the order-of-brand entry and market share.     

Age,order of entry,strategic orientation,and organizational performance

This paper proposes an empirical test of several hypotheses linking age, order of entry, and strategic orientations to a firm's performance. Three strategies are defined: cost-leadership strategy, innovative differentiation, and marketing differentiation. The aim is to show that the impact on performance of both age and each of the three strategic orientations may differ according to a firm's order of entry into an industry.Following Lieberman and Montgomery's (1998) evaluation of their major contribution on first mover advantage, we emphasize three points. First, we develop and test hypotheses related to early and late followers' strategic orientations, broadening the scope of traditional studies on pioneers. Second, the model combines the dimensions of a firm's age, order of entry, and strategic orientations, as well as industry conditions (stage of the industry, environmental unpredictability, and technology diffusion), to establish a contingent model of performance analysis. Finally, the empirical study deals chiefly with organizational performance and not market share, which is considered a typical advantage accruing to pioneers.In addition, the scope of the study (582 French manufacturing firms) provides the means to fill a void in empirical studies because it is a broad cross-sectional test on non-U.S. data. The firms are mainly private, small to medium-sized, and single or dominant business firms. Therefore, our assumptions must be understood as particularly applicable to this type of firm.The results reveal important lessons for practitioners. First, we did not find a first-mover advantage in terms of organizational performance. In addition, pioneers' organizational performance is enhanced by the cost leader strategy—contrary to our assumption emphasizing innovative differentiation for these firms. Second, early followers' performance benefits from innovative differentiation and marketing differentiation. Finally, late entrants developing a cost leader strategy have a significantly higher performance. All groups considered, late followers are the firms most sensitive to environmental uncertainty and age effects.Our study clarifies the impact of a firm's age and strategic orientations on its performance depending on the firm's order of entry. The implications of these results are particularly relevant for practitioners and entrepreneurs. First, a cost leadership strategy seems to be a guarantee for a pioneer to increase its organizational performance. New ventures should therefore take into consideration the fact that newness and innovative differentiation might not be the best strategic orientations for high performance in the long run. Second, as a second mover, however, developing a superior product and being able to market it efficiently appear to be the enhancing factors of firm performance. Third, for both pioneers and early followers, age does not significantly reduce their performance. However, the longer a firm waits before entering, the greater is the negative effect of age on its performance. This is due to the difficulty of resisting competitive erosion, because pioneers and early followers drive the changes in the industry. The identification of these effects should help managers and stakeholders to make more effective entry decisions to sustain a firm's advantage, leading to better performance and higher probability of survival.     

Ownership in cross-border acquisitions and entry timing of the target firm

We examine how the entry timing of targets influences the initial and the post-entry percentage of ownership acquired by multinationals. We argue that targets that have entered earlier into the market launch signals of lower uncertainty in contexts where first-mover advantages exist. As a consequence, multinationals are willing to buy higher levels of ownership in these early entrant targets and to increase their participation in the subsidiary equity in the post-entry stage. Finding support for these relationships, we study how market age and innovative behaviour of the target reduce the importance of leading time as determinant of the ownership decision.     

金砖四国创意产品贸易国际竞争力的比较研究

本文采用国际市场占有率指数、显性比较优势指数和贸易竞争力指数对金砖四国创意商品和创意服务的国际竞争力进行比较研究。结果表明:中国和印度的创意商品具有优势,创意服务的竞争力较弱,俄罗斯和巴西的创意服务优势明显,创意商品的竞争力很弱,金砖四国处于全球创意产业价值链的不同节点。因此,要重视创意服务在创意产业中的重要地位,发挥文化资源优势,对我国创意资源进行整合,加大创意产业资金投入,落实积极的人才发展战略,加快制定鼓励创意产业发展的科技、财税和金融政策,加强金砖国家间创意产业合作。     

中国移动通信双寡头市场结构及企业行为的博弈分析

随着移动通信业务在整个电信业务中所占的比重日益增加,移动通信业的发展状况也倍受世人关注。运用博弈论的相关基本原理,对中国移动通信市场的双寡头垄断结构以及企业的行为进行微观分析,从而为其培育竞争优势、提高核心竞争力提供理论依据,同时为应对加入世贸过渡期后国际移动通信业巨头的竞争提供政策建议。     

Corporate ventures into industrial markets: Dynamics of aggressive entry

This article reports a study of the effect of aggressive entry by firms venturing into new industrial markets. There are three main sets of results:First, there is a significant correlation between the competitive attractiveness of the target industry and the initial share objective set by the corporation venturing into that industry.Second, the downstream share objective, set at the launch of the venture is significantly correlated with several key marketing strategy and investment strategy options made by the firm at the start of operations.Third, if most of these key strategy decisions are made under the assumption that a high share position will rapidly be achieved, their resulting performance, in terms of both market share and ROI, is superior to firms which enter with less aggressive share aspirations.These results are particularly appealing to the large established firm which has the resources and thus can both afford to absorb the cost of failure and afford to make significant front-end investments in aggressive initial marketing expenses and investments in initial plant capacity. For such firms a feasible strategy for a new venture into an industrial market could be to: if possible (but not essential) seek industries/markets to enter which are less likely to provoke rivalrous responses; set aggressive market share targets; invest aggressively in initial plant capacity; develop aggressive sales force, sales promotion, advertising, service quality, and/or pricing programs relative to competitors, as appropriate to the particular industry being entered.The reason we suggest that the programs be aggressive as appropriate is that different strategic options are likely to be more effective in one industry than another. For instance, aggressive advertising and sales promotions could be more effective for consumables, while aggressive sales calling programs and superior service delivery could be the more effective route for capital goods businesses.     

区域分割、先行者优势与铁矿石进口价格谈判劣势

本文从钢铁行业市场的区域分割这一特点出发,通过一个多阶段博弈模型说明,市场结构越分散,大型钢铁企业争夺先行者优势的激励越大,从而在国际铁矿石谈判中的耐心程度越低。实证研究支持了这一结论。因此应当提高钢铁行业的市场集中度,尤其是促进跨区域兼并重组。     

Pioneers and followers: Competitive tactics,environment, and firm growth

Market pioneering—where a firm is first to offer a distinctively new product to the market—is a commonly recognized form of corporate entrepreneurship. As with other forms of corporate entrepreneurship, the linkage between market pioneering and firm performance has received limited empirical attention, much of which has yielded inconsistent results. Nonetheless, two conclusions regarding when and how pioneering relates to firm performance are revealed in the literature. First, theory and past research suggest that pioneering is an environment-specific phenomenon. That is, certain types of environments may be most likely to encourage or reward the actions of pioneers, while these same actions may meet with limited success in other environments. Second, theory and past research suggest that firm performance is affected by the fit between a firm's pioneer/follower status and its competitive tactics. In other words, market entry order moderates the effectiveness of a firm's competitive tactics such that certain tactics will be most effective when employed by market pioneers, while other tactics will be most effective when employed by market followers.Considered jointly, the preceding observations suggest that insights might be gained regarding the effective management of market pioneering and market following by seeking to understand (a) how these phenomena are manifested in different industry environments and (b) what pioneers and followers do differently in these environments to promote their performance. The research described in this paper addresses these issues. In particular, this paper develops theory that describes how particular competitive tactics are thought to relate to firm sales growth rate among market pioneers and market followers in two distinct environmental settings. Hypotheses are developed based on the following research propositions:P1: In hostile environments, pioneers and followers will differentially benefit in achieving high sales growth rates from their reliance on relatively high prices, relatively broad product lines, relatively broad served (geographical) markets, relatively advanced process technologies, and relatively advantageous purchasing arrangements.P2: In benign environments, pioneers and followers will differentially benefit in achieving high sales growth rates from their reliance on relatively high quality products, relatively strong product warranties, relatively high advertising and promotion expenditures, relatively strong control over distribution channels employed, and relatively large numbers of distribution channels employed.To test the hypothesized relationships, data were collected from the senior managers of 103 independent, nondiversified manufacturing firms operating in 75 industries. Cluster analysis, ANOVA, and correlational analysis were employed as the principal analytical techniques.The results suggest that market pioneers grow neither more nor less rapidly than market followers. However, in hostile environments, pioneering may enable firms to break out of the dominant price-based mode of competition and grow in spite of charging high prices. This ability of pioneers to excel in hostile environments seems to be further facilitated by limiting product line breath to a small number of product offerings that provide a “tight fit” with market needs. Pioneers in hostile environments also appear to be relatively better served than followers from gaining a wide geographical distribution for their products. Followers in hostile environments, on the other hand, should seek to reduce their cost structures in order to effectively sustain low price strategies. The employment of advanced process technologies and the pursuit of “purchasing advantages” were actions which proved to be more advantageous for followers than for pioneers in hostile environments.The managerial implications of this research applicable to benign environment firms are quite different. Other things being equal, relatively high prices may not be as detrimental to growth among followers in benign environments as they are among followers in more hostile environments. Benign environment followers may, in fact, be better off when they charge relatively high prices and compete on non-price bases. The results also suggest that, in benign environments, offering products with warranties superior to those of competitors may have a significantly more positive effect on sales growth among pioneers than followers. Moreover, employing a large number of distribution channels appears to benefit pioneers more than followers. However, among the sampled firms, benign environment pioneers that realized the greatest growth did not have extensive control over distribution channel members. Therefore, benign environment pioneers may grow more quickly if they target their distribution-related resources toward expanding their channels rather than toward controlling some smaller number these channels.This study contributes to the pioneering literature by having corroborated several findings of the PIMS-based studies regarding tactical differences between pioneers and followers, and by having further documented the relevance of market entry order (or pioneer/follower status) as a moderator of the performance associated with particular competitive tactics. Moreover, by having examined the tactics-performance relationships of pioneers and followers in two distinct environmental settings, this study adds specificity and empirical support to the emerging theoretical paradigm that depicts pioneering as an environment-specific phenomenon. Finally, this study contributes to the literature on coping with hostility by having theorized about and empirically identified common and effective bases for competition under varying levels of environmental hostility.     

Capabilities and competitive tactics influences on performance: Implications of the moment of entry

This article examines the implications that the moment of market entry has for the effect of capabilities and competitive tactics on firm performance, using a sample of 253 companies from the information and communications technology industry. The results show that technical capabilities and low cost orientation are learning factors in the firms' performance, regardless of the moment of entry into the market. The study shows how the two perspectives of competitive strategy and resource-based view complement each other to incorporate different competitive factors in a coherent model for the study of entry timing. The study takes the sustainability model of competitive advantage further, by demonstrating that certain capabilities and competitive tactics can allow pioneers and early followers to achieve and maintain superior performance in a dynamic, hostile and with high level of imitation industry. This study also shows that the availability of a combination of marketing capabilities and low cost orientation will allow late followers' firms to take advantage of early entrants' mistakes.     

Information Gathering and Customer Value Creation in Business-to-Business Services:

Regardless of whether a product or a service is offered, or whether the customer is an organization or a final consumer, the company that adopts a market orientation (seeks to gather information on the customer and to offer the highest value to the customer) has the greatest potential for success in the marketplace. This study examines whether the adoption of business-to-business services by customer firms is influenced by the perceived level of market orientation of the service provider. Empirical results from the telecommunication industry showed that if the vendor firm were perceived to gather relevant customer information and to provide a more valuable service offer to the customer firm, the customer would weight the value of the service offer more highly in the adoption decision. Managerial implications and directions for future research are presented in the concluding section.     

中国移动通信市场的规制与竞争

基于中国移动通信产业的发展,本文分析了移动通信产业的市场结构与竞争行为,研究发现它们与政府规制形式紧密相关。中国移动通信业的市场结构与竞争部分地是政府规制的结果,也是规避规制的创新结果,而影响移动通信市场结构与竞争的因素包括技术进步、市场变化和规制等。     

Assessing Progress in Research on Industrial Evolution and Economic Growth: A Review Article

This article reviews a new three-volume collection of previously published articles on how industry structures change, edited by David Audretsch and Steven Klepper. Central themes in the chosen contributions are summarized, and the disproportionate emphasis on relatively new rather than clearly seminal articles is noted. A more detailed analysis is undertaken on how the chosen articles illuminate the determinants of incumbent firms' survival and growth advantages, i.e., scale economies, first-mover advantages, organizational competence, and growth-affecting strategies such as preemptive innovation and mergers.     

Market orientation, competitive advantage, and performance: A demand-based perspective

This study assesses how customer value affects a firm's market orientation and consequently, competitive advantage and organizational performance in a service industry — the global hotel industry. The findings show that if a firm perceives its customers as valuing service, the firm is more likely to adopt both a customer and a competitor orientation; if the firm thinks its customers are price sensitive, the firm tends to develop a competitor orientation. Moreover, the greater a firm's customer orientation, the more the firm is able to develop a competitive advantage based on innovation and market differentiation. In contrast, a competitor orientation has a negative effect on a firm's market differentiation advantage. Finally, innovation and market differentiation advantages lead to greater market performance (e.g., perceived quality, customer satisfaction) and in turn, higher financial performance (e.g., profit, market share).