Missing the Starting Gun? Entry Timing Decisions into New Market Niches

This study analyzes incumbent entry timing decisions in new markets in the case of Encryption Software (ES). In ES first technological movers were slow to enter the downstream market, losing their initial advantages to the benefit of newcomers. This work tests the hypothesis that this wait-and-see strategy was an optimal choice compared to the assumption of inertia embedded in the decision process of potential entrants. We find that entry decision is not the outcome of firm rational balancing among different strategic variables, but it is more similar to a heuristic process that fails to accommodate the full logic of decision.Entry, Entrepreneurship, Innovation, Software.

PRODUCT STRATEGIES AND STARTUPS’ SURVIVAL IN TURBULENT INDUSTRIES: EVIDENCE FROM THE SECURITY SOFTWARE INDUSTRY

This paper seeks to explore the drivers of startups’ survival in turbulent industries, characterized by high rates of entry and exit, fragmented market shares, and a rapid pace of product innovation. Specifically, the paper aims to underscore the role played by post-entry product strategies, along with their interaction, beyond that of pre-entry conditions. Based on a sample of 270 startups that entered the Security Software Industry from 1989 till 1998, we find evidence that surviving entities are those that more aggressively adopt versioning and product portfolio strategies. Interesting enough, strategic learning seems to play a major role: Focusing on one of the two product strategies commands a higher survival probability than adopting a mixed strategy.

Explaining Early Adoption on New Medicines: Regulation, Innovation and Scale

Understanding how price regulations affect the adoption of new patent-protected pharmaceutical technologies is a crucial question in designing health systems. This paper addresses this question by examining how price expectations shape the probability of launch, controlling for competition, market size expectations, firm and molecule heterogeneity across the major OECD markets during 1999-2008. Due to the censoring of launch data we use discrete time duration modelling with parametric and semi-parametric duration dependence specification. A sub-sample analysis including only EU countries also investigates the impact of price interdependencies and potential firm strategies in launch and pricing decisions. The empirical analysis of the global set of molecules which have diffused across more than 10 markets in the OECD, suggests there is a statistically significant and robust price effect in the adoption of new pharmaceutical technologies; low-prices result in reduced and slower adoption. Concentrated therapeutic subgroups, reflecting market crowding constitutes a significant barrier to entry. Sub-sample findings from the EU market suggest strategic firm behaviour with firms delaying launch in low-priced markets and attempts to maintain price differentials across interdependent markets to a minimum due to price complementarities. Firm economies of scale and the therapeutic importance of innovations are other important drivers of adoption speed.pharmaceutical innovation, regulation, adoption, duration analysis

Partner Selection Criteria in Strategic Alliances When to Ally with Weak Partners

In many emergent markets, cross-industry alliances are necessary to develop and market new products and services. The resource-based view suggests that firms form alliances to access or acquire valuable, rare, non-imitable and non-substitutable resources, and that such access determines the level of profits. Hence, firms confronted with the choice between partners with strong versus partners with weak resource endowments should choose the former. We contest this view and argue that firms benefit from allying with weak partners at certain times. In essence, we suggest that partner selection involves assessing the relative importance of strong resource endowments and aligned strategic aspirations over time. By adopting an evolutionary approach, we show that appropriate partner selection criteria are dynamic and may involve allying with weak partners in the initial exploratory stage, with weak and/or strong partners in the development stage and with strong partners in the maturity stage. Our findings suggest that the resource-based understanding of strategic alliances should be extended to include a more profound role for a partner firm’s strategic aspiration.Strategic alliances, partner selection, resources, aspirations

Product strategies and survival in schumpeterian environments: evidence from the US security software industry.

This paper seeks to explore the drivers of survival in environments characterized by high rates of entry and exit, fragmented market shares, rapid pace of product innovation and proliferation of young ventures. The paper aims to underscore the role played by postentry product strategies, along with their interaction, after carefully controlling for "at entry" factors and demographic conditions. Based on a population of 270 firms that entered the US security software industry between 1989 and 1998, we find evidence that surviving entities are those that are more aggressive in the adoption of versioning and portfolio broadening strategies. In particular, focusing on any one of these two strategies leads to a higher probability of survival as opposed to adopting a mixed strategy.Survival; Versioning; Portfolio broadening; Young ventures; Sotware;

Entry-timing strategies: The road ahead

We argue that, despite significant progress, the extant entry timing literature still suffers from several shortcomings and, in particular, it fails to integrate into a coherent and integrative framework the latest findings from contiguous management literature streams. We propose that entry timing literature can be significantly enriched and its predictive power enhanced by incorporating insights from institutional theory, industry life-cycle, categorical dynamics, and by further elaborating on the implications of these theories for the firms' entry timing decisions. Our review also suggests that our understanding of early movers advantages can be improved by considering more explicitly the strategies and business models pursued by later entrants

What do we really know about when technological innovation improves performance (and when it does not)?

Most approaches to innovation bear the implicit assumption that increased innovativeness leads to improved organizational performance. Thus, more attention has been focused on innovativeness than on innovation performance; on novelty than on value. However, recent empirical evidence calls into question the unqualified optimism surrounding innovation, and leads us to ask what we really know about when technological innovation improves performance. In this paper, we seek to make a contribution by presenting the results of an exhaustive review of extant knowledge on the outcomes of technological innovation. Our synthesis of the literature allows us to relate in one parsimonious model the drivers and moderators of the antecedents, technical outcomes, and performance outcomes of technological innovation and technological change. We also make sense of the proliferation of terms, and consequent terminological ambiguity, which characterizes a lot of work on technological innovation. Finally, in the light of the model presented and recent developments in work on firm capabilities, we indicate possible avenues for further development of this critical area of research.Technological innovation; organizational performance; innovation and innovativeness;

Thinking about Entry of Firms: A Theoretical Discussion

This paper analyses the factors that play a role in determining entry of new firms into markets from a theoretical point of view. We analyse the traditional interpretation of entry as a mechanism of re-equilibrating profits towards their long-run level. Then, we concentrate on other theoretical approaches, showing how the characteristics of technological innovation, the endowment of skills and competencies of the entrants, the role of information signals, the phases of the industry life cycle, the sociological concepts of legitimization and competition, and the psychological aspects might play fundamental roles in explaining new entry. The paper debates possible cross-fertilizations among theories: The discussion results in some fruitful intertwinements among the different relevant features about entry and spawns new collaborative and interdisciplinary research to create additional knowledge about entry. Insights about international entrepreneurship (IE) are also discussed.</p

Managerial satisfaction with subsidiary performance; the influence of the parent MNE's capabilities and the subsidiary's environment

Multinational enterprise performance is one of the most researched topics in the strategic management literature over the last thirty years. Despite the proliferation of studies, the dispute over the relation between firms’ international investment activities and corporate performance has not yet reached a consensus. This paper’s contribution is threefold. First, we focus on entry by West European multinational enterprises into Central and East European countries. Second, we develop a multi-theory argument, combining insights from transaction cost, new institutional, behavioral, resource-based and international strategy theories. Third, we estimate the determinants of managerial satisfaction with subsidiary performance with questionnaire data for a sample of 198 subsidiaries.

The Effect of Strategic Industry factor innovation on incumbent reaction, survival, and performance

An industry is in constant evolution. Competitors, innovators, or other industry stakeholders can introduce new (hitherto ‘unknown’) resources or capabilities that increase the basis of competition in an industry. Resources and capabilities that form the basis of industry competition and that drive company performance are called ‘strategic industry factors’. The introduction of new resources or capabilities as strategic industry factors is called ‘strategic industry factor innovation’. However, there are also strategic industry factor innovations associated with ‘known’ resources and capabilities. When considering new business models like Netflix, Zara, Dell, iPod/iTunes, amongst many others, the innovation is not necessarily applying ‘new’ resources or capabilities to the industry. Instead, these examples show that new combinations of existing, ‘known’ resources and capabilities can also be difficult for incumbents to respond to