Swift and Smart: The Moderating Effects of Technological Capabilities on the Market Pioneering-Firm Survival Relationship

We extend the concept of first-mover advantage to the context of high-technology industries with multiple product generations, and propose that the notion of first-mover advantage needs to be viewed not only through a dynamic lens, but also in conjunction with technological capability. Our main finding is that first-mover advantages are best understood in tandem with the firm's technological capabilities; early entry is beneficial only for pioneers that are technically strong. However, pioneers that are low on technological capabilities suffer from poor survival rates vis-a-vis market responders or nonentrants into new product generations.

[1]  Gregory S. Carpenter,et al.  Late Mover Advantage: How Innovative Late Entrants Outsell Pioneers: , 1998 .

[2]  W. Mitchell.  Dual clocks: Entry order influences on incumbent and newcomer market share and survival when specialized assets retain their value , 1991 .

[3]  J. Farley,et al.  Determinants of Financial Performance: A Meta-Analysis , 1990 .

[4]  Teck-Hua Ho,et al.  New product development: the performance and time-to-market tradeoff , 1996 .

[5]  G. Lilien,et al.  The timing of competitive market entry: an exploratory study of new industrial products , 1990 .

[6]  Erwin Danneels,et al.  THE PROCESS OF TECHNOLOGICAL COMPETENCE LEVERAGING , 2007 .

[7]  D. B. Montgomery,et al.  First-mover (dis)advantages: Retrospective and link with the resource-based view , 1998 .

[8]  Clayton M. Christensen.  Patterns in the evolution of product competition , 1997 .

[9]  Christopher L. Tucci,et al.  Incumbent Entry into New Market Niches: The Role of Experience and Managerial Choice in the Creation of Dynamic Capabilities , 2002, Manag. Sci..

[10]  J. March,et al.  A Behavioral Theory of the Firm , 1964 .

[11]  Robert W. Ruekert,et al.  Marketing's Role in the Implementation of Business Strategies: A Critical Review and Conceptual Framework , 1987 .

[12]  W. Mitchell.  Whether and When? Probability and Timing of Incumbents' Entry into Emerging Industrial Subfields , 1989 .

[13]  O. Granstrand,et al.  Multi-Technology Corporations: Why They Have “Distributed” Rather Than “Distinctive Core” Competencies , 1997 .

[14]  T. Davenport,et al.  Toward an innovation sourcing strategy , 2003 .

[15]  Steven Klepper,et al.  The capabilities of new firms and the evolution of the US automobile industry , 2002 .

[16]  William Boulding,et al.  Sustainable Pioneering Advantage? Profit Implications of Market Entry Order , 2003 .

[17]  Gwendolyn K. Lee.  Relevance of Organizational Capabilities and Its Dynamics: What to Learn from Entrants’ Product Portfolios About the Determinants of Entry Timing , 2008 .

[18]  D. Teece.  Profiting from technological innovation: Implications for integration, collaboration, licensing and public policy , 1993 .

[19]  Constance E. Helfat,et al.  Strategic Renewal of Organizations , 2009, Organ. Sci..

[20]  S. Klepper,et al.  Time Paths in the Diffusion of Product Innovations , 1982 .

[21]  C. Granger.  Investigating causal relations by econometric models and cross-spectral methods , 1969 .

[22]  Constance E. Helfat,et al.  Inter‐temporal economies of scope, organizational modularity, and the dynamics of diversification , 2004 .

[23]  William T. Robinson,et al.  Are market pioneers intrinsically stronger than later entrants , 1992 .

[24]  Clayton M. Christensen.  The Rigid Disk Drive Industry: A History of Commercial and Technological Turbulence , 1993, Business History Review.

[25]  Karel Cool,et al.  Asset stock accumulation and sustainability of competitive advantage , 1989 .

[26]  G. Day.  The Capabilities of Market-Driven Organizations , 1994 .

[27]  William T. Robinson,et al.  Is the First to Market the First to Fail? Empirical Evidence for Industrial Goods Businesses , 2002 .

[28]  Daniel A. Levinthal,et al.  Exploration and Exploitation in Organizational Learning , 2007 .

[29]  Ada Leiponen.  Competencies, Innovation And Profitability Of Firms , 2000 .

[30]  D. Teece,et al.  DYNAMIC CAPABILITIES AND STRATEGIC MANAGEMENT , 1997 .

[31]  M. Cusumano,et al.  Technological Pioneering and Competitive Advantage: The Birth of the VCR Industry , 1987 .

[32]  James B. Wade.  Dynamics of organizational communities and technological bandwagons: An empirical investigation of community evolution in the microprocessor market , 1995 .

[33]  Clayton M. Christensen.  The Innovator's Dilemma , 1997 .

[34]  Daniel A. Levinthal,et al.  The myopia of learning , 1993 .

[35]  Constance E. Helfat,et al.  Dynamic capabilities : understanding strategic change in organizations , 2007 .

[36]  Clayton M. Christensen,et al.  CUSTOMER POWER, STRATEGIC INVESTMENT, AND THE FAILURE OF LEADING FIRMS , 1996 .

[37]  J. Lerner.  An Empirical Exploration of a Technology Race , 1997 .

[38]  Andrew D. Henderson,et al.  Firm Strategy and Age Dependence: A Contingent View of the Liabilities of Newness, Adolescence, and Obsolescence , 1999 .

[39]  David M Levinson,et al.  First Mover Advantages , 2011 .

[40]  Igor H.Ansoff.  Strategic Management , 1979 .

[41]  Eric R. Ziegel,et al.  Survival analysis using the SAS system , 1995 .

[42]  M. Tushman,et al.  Organizational Evolution: A Metamorphosis Model of Convergence and Reorientation , 1985 .

[43]  S. Ghoshal,et al.  Markets, Firms, and the Process of Economic Development , 1999 .

[44]  W. P. Barnett,et al.  Why are Some Organizations More Competitive than Others? Evidence from a Changing Global Market , 2004 .

[45]  C. Freeman.  The Competitive Challenge. Strategies for Industrial Innovation and Renewal. David J. Teece, Ed. Ballinger (Harper and Row), Cambridge, MA, 1987. xii, 256 pp., illus. $26.95. Ballinger Series on Innovation and Organizational Change. Based on lectures, Berkeley, CA, 1984-85. , 1988, Science.

[46]  Curba Morris Lampert,et al.  Entrepreneurship in the large corporation: a longitudinal study of how established firms create breakthrough inventions , 2001 .

[47]  G. Hoetker.  The use of logit and probit models in strategic management research: Critical issues , 2007 .

[48]  Danny Miller,et al.  SOURCES AND CONSEQUENCES OF COMPETITIVE INERTIA: A STUDY OF THE U.S. AIRLINE INDUSTRY. , 1994 .

[49]  B. Bayus.  Speed‐to‐Market and New Product Performance Trade‐offs , 1997 .

[50]  Ron Adner.  When Are Technologies Disruptive: A Demand-Based View of the Emergence of Competition , 2002 .

[51]  D. Teece.  The Competitive challenge : strategies for industrial innovation and renewal : the Transamerica lectures in corporate strategy, School of Business, University of California, Berkely , 1987 .

[52]  J. Mahon,et al.  Meta-Analysis of the Impact of Research Methods on Findings of First-Mover Advantage , 1997 .

[53]  M. Lieberman.  The learning curve, technology barriers to entry, and competitive survival in the chemical processing industries , 1989 .

[54]  S. Lippman,et al.  Uncertain Imitability: An Analysis of Interfirm Differences in Efficiency under Competition , 1982 .

[55]  B. Wernerfelt,et al.  A Resource-Based View of the Firm , 1984 .

[56]  Geoffrey A. Moore,et al.  Crossing the Chasm , 1991 .

[57]  J. P. Andrew,et al.  Innovating for cash. , 2003, Harvard business review.

[58]  Robert A. Burgelman.  Intraorganizational Ecology of Strategy Making and Organizational Adaptation: Theory and Field Research , 1991 .

[59]  Steven Klepper,et al.  The Making of an Oligopoly: Firm Survival and Technological Change in the Evolution of the U.S. Tire Industry , 2000, Journal of Political Economy.

[60]  Clive W. J. Granger,et al.  Some aspects of causal relationships , 2003 .

[61]  Donald E. Hatfield,et al.  Doomed from the start: what is the value of selecting a future dominant design? , 1999 .

[62]  Michael Gort,et al.  First Mover Advantage and the Speed of Competitive Entry, 1887-1986 , 1999 .

[63]  M. J. Foster,et al.  The value of formal planning for strategic decisions: A comment , 1986 .

[64]  Brian S. Silverman,et al.  Churn, Baby, Churn: Strategic Dynamics Among Dominant and Fringe Firms in a Segmented Industry , 2006, Manag. Sci..

[65]  Erwin Danneels.  The dynamics of product innovation and firm competences , 2002 .

[66]  M. Hitt,et al.  GUEST EDITORS' INTRODUCTION TO THE SPECIAL ISSUE STRATEGIC ENTREPRENEURSHIP: ENTREPRENEURIAL STRATEGIES FOR WEALTH CREATION , 2001 .

[67]  K. Eisenhardt,et al.  Speeding Products to Market: Waiting Time to First Product Introduction in New Firms. , 1990 .

[68]  William J. Abernathy,et al.  Patterns of Industrial Innovation , 1978 .

[69]  J. Gans,et al.  The Product Market and the Market for 'Ideas': Commercialization Strategies for Technology Entrepreneurs , 2002 .

[70]  P. Allison.  Survival analysis using the SAS system : a practical guide , 1995 .

[71]  R. Rumelt.  Theory, Strategy, and Entrepreneurship , 2005 .

[72]  M. Tushman,et al.  Technological Discontinuities and Organizational Environments , 1986 .

[73]  G. Tellis,et al.  Pioneer Advantage: Marketing Logic or Marketing Legend? , 1993 .

[74]  Paul D. Allison,et al.  Survival analysis using sas®: a practical guide , 1995 .

[75]  M. Lessnoff.  Capitalism, Socialism and Democracy , 1979 .

[76]  Rajshree Agarwal,et al.  Evolutionary trends of industry variables , 1998 .

[77]  Peter J. Lane,et al.  Strategizing Throughout the Organization: Managing Role Conflict in Strategic Renewal , 2000 .

[78]  Stefan H. Thomke,et al.  Asset accumulation, interdependence and technological change: evidence from pharmaceutical drug discovery , 2002 .

[79]  J. Hauser,et al.  Integrating R&D and marketing: A review and analysis of the literature , 1996 .

[80]  P. Bierly,et al.  Generic knowledge strategies in the U.S. pharmaceutical industry , 1996 .

[81]  Kathleen M. Eisenhardt,et al.  DYNAMIC CAPABILITIES, WHAT ARE THEY? , 2000 .

[82]  Fernando F. Suarez,et al.  The Role of Environmental Dynamics in Building a First Mover Advantage Theory , 2007 .

[83]  Michael L. Tushman,et al.  Technology Cycles, Innovation Streams and Ambidextrous Organizations , 1997 .

[84]  Thomas R. Gulledge,et al.  Investment in knowledge: a generalization of learning by experience , 1994 .

[85]  Clayton M. Christensen.  The Innovator's Dilemma: When New Technologies Cause Great Firms to Fail , 2013 .

[86]  J. Gans,et al.  The Product Market and the Market for 'Ideas': Commercialization Strategies for Technology Entrepreneurs , 2002 .

[87]  A. Gambardella,et al.  Does technological convergence imply convergence in markets? Evidence from the electronics industry , 1998 .

[88]  Nils Stieglitz,et al.  Innovations and the Role of Complementarities in a Strategic Theory of the Firm , 2007 .

[89]  Daniel A. Levinthal,et al.  ABSORPTIVE CAPACITY: A NEW PERSPECTIVE ON LEARNING AND INNOVATION , 1990 .

[90]  C. Gibson,et al.  THE ANTECEDENTS , CONSEQUENCES , AND MEDIATING ROLE OF ORGANIZATIONAL AMBIDEXTERITY , 2004 .

[91]  J. Adetunji Adegbesan,et al.  What Do We Really Know about When Technological Innovation Improves Performance (and When it Does Not)? , 2007 .

[92]  L LilienGary,et al.  The Timing of Competitive Market Entry , 1990 .

[93]  R. Reed,et al.  Causal Ambiguity, Barriers to Imitation, and Sustainable Competitive Advantage , 1990 .

[94]  April Franco,et al.  KNOWLEDGE TRANSFER THROUGH INHERITANCE: SPIN- OUT GENERATION, DEVELOPMENT, AND SURVIVAL , 2004 .

[95]  Howard Thomas,et al.  STRATEGIC RENEWAL AND THE INTERACTION OF CUMULATIVE STRESS AND INERTIA , 1992 .

[96]  Constance E. Helfat,et al.  The birth of capabilities: market entry and the importance of pre-history , 2002 .

[97]  M. Hitt,et al.  Strategic entrepreneurship: entrepreneurial strategies for wealth creation , 2001 .