Considerations on “Research on non-market actions: A commentary essay”

This commentary is in response to the commentary, “Research on Non-Market Actions: A Commentary Essay” [Wang, C-J. Research on Non-Market Actions: A Commentary Essay. J Bus Res (2008)] on the paper, “First come, first served: How market and non-market actions influence pioneer market share” [Usero B, Fernández Z, First come, first served: How market and non-market actions influence pioneer market share. J Bus Res (2008), doi:10.1016/j.jbusres.2008.07.005]. The commentary responds directly to Wang's [Wang, C-J. Research on Non-Market Actions: A Commentary Essay. J Bus Res (2008)] comments and proposes further lines of research that integrate the competitive dynamic approach with studies of non-market actions.     

Research on non-market actions: A commentary essay

This commentary is about the article, “First come, first served: how market and non-market actions influence pioneer market share” (Usero and Fernández, 2009). Though non-market actions are common competitive weapons in practice, relevant studies are surprisingly rare in strategic research. The empirical results of Usero and Fernández demonstrate that in some specific contexts, traditional market actions do not affect market position, but non-market actions do. However, to erode first mover's advantage, this study considers only the relative frequency of actions and does not measure quality, timing and strength of actions. This commentary also discusses some practical and theoretical implications of Usero and Fernández's study.     

First-mover and incumbency advantages in mobile telecommunications

The present study analyzes data of 191 mobile network operators from 49 countries in order to identify the extent of first-mover and incumbency advantages. A large number of new market entry opportunities and involvement of many previous state-owned monopolists have characterized the mobile telecommunication services industry over the last 20 years. The results of this study show that both, first-movers and incumbents in the mobile telecommunication services industry are more successful regarding market share and operational financial results than later entrants. A pioneer position and incumbency are only loosely connected, with success originating both from first-mover and incumbency advantages. Moreover, the timing effect is stronger and more sustainable for market share compared to operating margin, indicating that followers successfully compensate part of their market share disadvantages with strategies like SIM-only tariffs, outsourcing and alternative distribution approaches. In addition, the typical rank-based measurement of timing position reveals somewhat stronger associations than a variable that is using the time elapsed between commercial launches of pioneers and followers.     

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.     

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.     

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.     

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.     

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).     

An Empirical Analysis of Follower Entry Timing Decisions

Followers frequently incur market share penalties due to delayed entry. How might they then respond to a pioneer? This paper attempts to answer this question. Followers are assumed to be able to respond by choosing a time interval of entry relative to the pioneer, and by focusing on consumer relative preferences for their brand. These choices potentially involve different trade-offs. For example, achieving higher relative preferences may result in an entry delay that would increase the leadtime. We argue that the follower's response will depend on the magnitude of the pioneering effect. Our analysis of the ASSESSOR database indicates that followers respond primarily by reducing leadtimes. We further find that later followers achieve higher consumer relative preferences than earlier followers do. While these findings merit generalizability as they concern multiple brands and categories, many of which still exist, their implications should be qualified with caution since the data do not go beyond 1984.

     

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.     

Fine tuning market oriented practices

Being more market oriented—in other words, getting closer to customers while keeping a wary eye on competitors in order to respond quickly and effectively to changing market conditions—has long been viewed as a key way of improving competitive advantage. However, there is still a lack of understanding about how to optimize the implementation of market oriented business strategies, particularly in the service sector. This article addresses that gap by investigating how customer and competitor focused practices can be fine tuned to create differential advantages. An in-depth qualitative study of professional, financial, and business service firms in New Zealand suggests that how well market oriented practices are implemented is much more important than the range of practices that are adopted.     

Innovation and the market share of private labels

Abstract

This study investigates national brand manufacturers' innovations, and analyses the relationship between innovation and the market share of private labels in the consumer packaged-goods industry. The data for this study come from two extensive databases that cover 142 product categories during 2004–2006. According to logistic regression methods adapted to the resource allocation context, manufacturers' innovation strategy has a negative impact of the market share of private labels in two specific market conditions. Managers therefore must design a strategy that aligns with the market conditions because an innovation strategy may be effective in some situations, whereas in others a different strategy or combination of strategies may be more appropriate.     

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.     

外资进入、劳动收入份额与技能工资溢价——来自2008年服务业企业普查数据的经验分析

运用2008年第二次全国经济普查服务业企业数据,文章实证检验了外资进入对服务业企业劳动收入份额和技能工资溢价的影响。结果显示外资企业存在更高的劳动收入份额,且外资进入程度对当地企业的劳动收入份额存在正向的外溢效应。文章进一步将不同所有制类型与技能劳动力占比的交互项引入工资方程,发现外资企业存在更高的技能工资溢价。我们进一步验证了外资进入对当地劳动力市场技能工资溢价的影响。结果表明,在那些外资渗透率较高、市场竞争相对激烈的地区和行业,外资企业的技能工资溢价现象会产生溢出效应,促使当地企业提高对高技能员工的薪酬待遇。因此,在合理发挥服务业外资进入对收入分配优化效应的同时,也要采取相关措施防止其进一步拉大工资差距。     

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.     

转型经济时期中国企业市场与非市场行为研究

文章选择房地产行业为研究样本,通过内容分析法,以政策事项生命周期的研究视角,探讨了企业的市场与非市场行为在中国转型经济时期不稳定的外部制度环境中动态的演变过程.结果表明,中国特殊的政治、经济及文化背景使得事项过程中的企业行为的演变路径与西方相比存在着显著的不同,体现了中国的转型特色.     

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.     

Managing Relationships in the UK Organic Food Sector

The paper explores the management of business-tobusiness relationships in the rapidly growing UK organic food industry. Interviewees perceived that supermarkets were attempting to use market power to dominate the industry, despite their partnership rhetoric. This was potentially at the expense of smaller companies that had pioneered the development of the organic food sector. A severe supply shortage of organic products had boosted the relative bargaining position of the pioneer companies. As this advantage declines, the pioneer companies face a limited window of opportunity to build relationships with the supermarkets. The paper concludes by considering implications for relationships within the industry, and for relationship management in general.     

日本出境旅游现状及我国拓展日本客源市场对策

我国国际旅游业的发展与日本客源市场有着非常密切的关系。日本旅游者主要前往亚洲国家旅游,目前韩国是接待日本旅游者最多的国家。我国可以采取改善旅游基础设施,提高服务质量,培养精通日语的服务人才,开发温泉旅游和滑雪旅游等措施拓展日本客源市场。     

INNOVATION MANAGEMENT IN THE GERMAN TRANSPORTATION INDUSTRY

This article develops a conceptual framework for innovation management in logistics service providers, taking both a macro‐sectoral and a micro‐firm level perspective. Empirical data pertaining to the German transportation industry is applied in order to illustrate the current situation. In the analysis, the author distinguishes between various types of innovation: (1) product/service and process innovation, (2) market novelties, product‐range novelties and product imitations, and (3) ad hoc and planned innovation. The results indicate that despite the importance of innovation for the competitiveness of logistics service providers, innovation activities of firms in this industry and the share of innovators are at a low level compared to other industries. Only 30% of the LSP's are innovators. LSP innovation rests less on structured innovation, new product development and new product commercialization processes, instead, becomes often visible in form of technological advanced infrastructure and equipment investments. It is recommended that in the future LSP's should make more use of one or all forms of innovation activity discussed in this article.