Early entrants attract better customer evaluations: evidence from the digital camera industry
Abstract
Purpose
In addition to pioneering, empirical work on entry order increasingly addresses fast followers and laggards and the potential advantages they are able to capture. There is also a growing consensus in the academia, that current measures of firm performance used in the entry order literature to study these advantages are inadequate. This study analyzes the relationship between entry order and customer evaluations, which, depicting the performance of the firm's products in the market, are used as a proxy for firm performance.
Design/methodology/approach
The study is set in the digital camera industry, analyzing entries into each new technology level, in terms of the sensor resolution of compact and bridge cameras. The complete dataset consisted of 1,816 digital camera models introduced between January 1996 and December 2017. The data are analyzed using hierarchical multiple linear regression.
Findings
The study finds evidence of early-mover advantage for the compact product category. In the compact camera consumer market, both first-movers and fast followers outperform late movers. Furthermore, the difference in performance in comparison to laggards is greater for first-movers than for fast followers. However, in the bridge category which consists of a more heterogeneous set of products, no significant entry-order effects are detected.
Originality/value
The results clearly indicate that there exists an early mover advantage. Furthermore, the results are not consistent across different product categories within an industry; hence, caution needs to be exercised when analyzing industry dynamics and entry order effects. Finally, our novel conceptualization of firm performance measured as online customer evaluation add new opportunities to investigate firm success
Keywords
Acknowledgements
The authors want to thank the editor and two anonymous reviewers for their detailed and constructive feedback during the revision of the manuscript. We also acknowledge feedback from seminar participants at the IEEE Technology and Engineering Management conference where an earlier draft of the manuscript was presented. This work was partially supported by the Academy of Finland (grant number 279087).
Citation
Kirjavainen, J., Mäkinen, S.J. and Dedehayir, O. (2020), "Early entrants attract better customer evaluations: evidence from the digital camera industry", European Journal of Innovation Management, Vol. ahead-of-print No. ahead-of-print. https://doi.org/10.1108/EJIM-03-2020-0086
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