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Article
Publication date: 1 December 1997

Cheryl Nakata and K. Sivakumar

Reports that, with sluggish growth in the developed markets of the world and increasing globalization, companies are turning to newly emerging markets for business…

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Abstract

Reports that, with sluggish growth in the developed markets of the world and increasing globalization, companies are turning to newly emerging markets for business expansion. Therefore, understanding entry strategies in emerging markets is likely to become an increasingly important issue for academic researchers and marketing practitioners. First movers are generally thought to garner fairly robust advantages over later entrants; however, the degree to which these advantages prevail in emerging markets is not known. Examines, by means of a literature review, the effects of emerging market conditions on first mover advantages. Advances several research propositions, based on the findings, presents a conceptual model, and identifies directions for further research.

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International Marketing Review, vol. 14 no. 6
Type: Research Article
ISSN: 0265-1335

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Article
Publication date: 15 November 2012

Tariq Malik

The purpose of this paper is to explore whether being a first‐mover into the Chinese market through strategic alliance with host companies provides competitive advantages

Abstract

Purpose

The purpose of this paper is to explore whether being a first‐mover into the Chinese market through strategic alliance with host companies provides competitive advantages to the foreign entrant. The aim is to understand the relevance of the first‐mover and internationalization process (incremental learning) for competitive advantage in China during environmental uncertainty. Thus, the author proposes that the first‐mover (foreign firm) would be able to deflect environmental uncertainty, such as the economic recession of 2008, by forming an alliance with Chinese enterprises earlier than its rivals.

Design/methodology/approach

Quantitative methods for data analysis were used in support of the proposition. The sample comprises 187 foreign multinational enterprises that entered into the Chinese market through strategic alliance with local partners. The dependent variable is return on assets (ROA) of the firm. The author used the timeline as the independent variable. The longer duration implies earlier entrants on the temporal scale. The author also used several controlled variables at the firm level, industry level and national level of the home country. The analysis was based on ordinary regression.

Findings

The result supports the main hypothesis in favour of the first‐mover advantage. Apart from the main effects in the hypotheses, there are some interesting alternative effects captured in the control variables. It appears that age of the firm tends to hamper firm performance. Industrial discretion is another control variable. The author predicted a positive coefficient. However, the result is not significant. The result shows competitive forces can lead to a better performance for the first‐mover. This observation is counterintuitive because monopoly is the source of performance, and competition reduces monopoly. It should be negatively correlated, but the result shows the opposite. In this sense, competition appears to be contributing to the firm's performance. A possible reason is that firms compete in the downstream of the industrial value china in established industries. Hence, the first‐mover advantage supports the early entrant in competitive conditions. Licensing mode of governance is negative. In comparison to alternative modes of governance, it appears that contractual mode such as licensing is less conducive for better performance. Firms that entered into IBA in China after her membership with WTO performed lower than those entered before WTO. Home country's R&D spending has not shown significant and positive influence on the performance.

Research limitations/implications

The author proposes that cultural distance needs to be included in the research and analysis for a better understanding on the phenomenon of first‐mover advantage. Second, the research needs to be replicated in other contextual settings. China is indeed a big market. However, there are multiple different institutional systems in the world. Third, it will be interesting to identify the late‐mover's advantage so that policy decisions can be made in comparative terms.

Originality/value

This paper is different and novel in two ways. First, it reveals that companies that had entered into Chinese markets were able to deflect some of the losses caused by the global slowdown. It means that internationalization can be both positive and negative. It is negative because global crisis can adversely affect almost all economies. However, it can be positive when some economies are stable, and the firm has entered into that stable market earlier than others. Second, the research reveals that cultural and institutional distance can be a positive source during an economic crisis. The author can see today (in 2012) that similar economies of the west are still struggling to get out of the recession of 2008.

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Chinese Management Studies, vol. 6 no. 4
Type: Research Article
ISSN: 1750-614X

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Article
Publication date: 1 June 1999

Hwei‐Chung Chen and Arun Pereira

An experimental design is used to examine the effect of products’ country‐of‐origin on first‐mover advantage. Specifically, focuses on the effects of favorable/unfavorable…

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Abstract

An experimental design is used to examine the effect of products’ country‐of‐origin on first‐mover advantage. Specifically, focuses on the effects of favorable/unfavorable country‐of‐origin on first‐mover advantage, as well as its effects with regard to “early followers” and “late followers”. The results have direct implications for products entering international markets as a first mover, “early” follower, or “late” follower. Results indicate that with increasing number of competitors entering an international market, a product’s favorable country image begins to lose its strategic importance. Consequently, the pursuit of first‐mover advantage may be more relevant than a positive country‐of‐origin effect. Also, the results suggest that for products from countries with a less than favorable image, it may be more useful to be a “follower” than a “first‐mover” because the advantage of being first in a market can be negated by the unfavorable country‐of‐origin effect.

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Journal of Product & Brand Management, vol. 8 no. 3
Type: Research Article
ISSN: 1061-0421

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Article
Publication date: 28 September 2012

Thomas Cleff and Klaus Rennings

In environmental policy first mover advantages for environmental technologies are often taken for granted. It is a popular view to see the state as a political…

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3642

Abstract

Purpose

In environmental policy first mover advantages for environmental technologies are often taken for granted. It is a popular view to see the state as a political entrepreneur who introduces a certain environmental policy instrument and thus becomes the world market leader or the lead market for the respective technology. Against this background, the purpose of this paper is to find out if the idea of first mover and lead market advantages can be justified by theories and empirical evidence.

Design/methodology/approach

A wide range of theoretical and empirical papers from the business management and industrial economics literature were reviewed to provide success factors for different timing‐to‐market and lead market strategies of environmental innovations.

Findings

A successful innovator is not necessarily the first but very often one of the early movers within the competition of different innovation designs. The paper shows that the success of a timing strategy depends on country‐specific lead market potentials, on market and technology characteristics and on the regime of the country‐specific regulation. On this basis the paper derives options for environmental innovation strategies for firms under different circumstances of markets, technologies and regulations.

Research limitations/implications

Patent applications, R&D expenditure, etc. are not unimportant input factors for the innovation, but all these supply‐side factors are beyond the focus of this article.

Practical implications

Research on the lead market and the timing to market takes centre stage when product innovations are in the development phase. Companies in countries that do not have sufficient above‐average lead market attributes must target product innovations to fit the preferences of users in the lead market.

Originality/value

This paper is the first to analyse if different timing to market advantages and lead market advantages for environmental innovation can be justified by theories and by empirical evidence.

Details

European Journal of Innovation Management, vol. 15 no. 4
Type: Research Article
ISSN: 1460-1060

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Article
Publication date: 1 December 2020

Frank Tian Xie, Naveen Donthu and Wesley J. Johnston

This paper aims to present a new framework that describes the relationship among market entry order and timing, the advantages accruing to first-movers and late-movers…

Abstract

Purpose

This paper aims to present a new framework that describes the relationship among market entry order and timing, the advantages accruing to first-movers and late-movers, entry timing premium (ETP), marketing strategy and enduring market performance of the firms. The framework, empirically tested using data from 241 business executives, expands extant research into new territory beyond first- and late-mover advantages in an attempt to reconcile a few streams of research in the area and provides an entry related, strategic assessment tool (ETP) for the managers. Contribution to marketing strategy theory and managerial implications are also presented.

Design/methodology/approach

Participants included informants in a firm’s strategic business unit who were the most familiar with a new product’s commercial launch, market condition at launch, competitor offerings, marketing activities and capabilities and eventual integration into or withdrawal from the product’s portfolio. Therefore, for the survey, the study targeted chief executive officers, vice presidents of marketing or sales, product or sales managers, general managers and regional managers. Both preference bias (Narus, 1984) and survivor biases among the respondents were addressed.

Findings

The research result of this study reveals two very significant aspects of marketing and marketing strategies. First, the importance of financial, pricing and cost strategies further attests to the fiercely competitive nature of the global market today and the tendency for firms to commoditize most products and services. An effective financial and pricing strategy, coupled with a higher level of ETP, is capable of leading a firm to initial market success in the product-market in which it competes. Both ETP (a positional advantage and resource of the firm) and financial and pricing strategies (a deliberate strategic decision of the management) are important to achieve this goal.

Research limitations/implications

This study is limited in several ways. The effects of entry order and timing on market performance could be dependent on the types of industries and types of product categories involved. However, as the hypotheses were well supported, the “industry specific” factors would provide “fine-tuning” in the future study. Second, the nature of the product (goods or services) may also present varying effects on the relationship studied (for differences between manufacturing and service firms in pioneering advantages, see Song et al., 1999). Services’ intangible nature, difficulty in protecting property rights, high involvement of boundary-spanning employees and customers, high reliance on delivery and quality, and ease of imitation may alter the proposed relationships in the model and the moderating effects. Third, although this study used a “retrospective” protocol approach in the data collection by encouraging respondents to recall market, product and business information, this study is not longitudinal. Lack of longitudinal data in any study involving strategic planning, strategy execution and the long-term effects is no doubt a weakness. In addition, due to peculiarity and complexity with regard to regulation and other aspects in pharmaceutical and other industries, the theory might be limited to a certain extent.

Practical implications

In all, the integrated framework contributes to the understanding of the intricate issues surrounding first-mover advantage, late-mover advantage, entry order and timing and the role of marketing strategy. The framework provides practitioners guidance as to when to enter a product-market to gain advantageous positions and how to maintain that advantage. Firms that use a deliberate late-mover strategy could also benefit from the research finding in mapping out their strategic courses of action.

Originality/value

This study believes that the halo effect surrounding first-mover advantage may have obscured the visions of some researchers and managers, and the pursuit of a silver bullet has led to frenzied interests in becoming a “first-mover” or a deliberate “late-mover”. The theoretical framework, which is substantiated by empirical testing, invalidates the long-held claim that entry of a particular kind (first-movers or late-movers) yields any unique competitive advantage. It is a firms’ careful selection of marketing strategies and careful execution of the strategies through effective operational tactics that would lead to enduring competitive advantage, under an adequate level of ETP.

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Journal of Business & Industrial Marketing, vol. 36 no. 7
Type: Research Article
ISSN: 0885-8624

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Article
Publication date: 29 July 2014

Bradley J. Koch

– The purpose of this paper is to analyze the first-mover decision as one decision of a set of strategic decisions that ultimately determine performance.

Abstract

Purpose

The purpose of this paper is to analyze the first-mover decision as one decision of a set of strategic decisions that ultimately determine performance.

Design/methodology/approach

The author used survey data collected from foreign-invested firms in Sichuan, China, to test for evidence that first-movers perform better than late-movers.

Findings

The results reveal that there is a first-mover advantage when the other strategic variables are not included in the model. When the entire set of strategic variables is included, however, the first mover variable loses its significance and the willingness of the foreign partner to commit additional resources becomes the best predictor of performance. Consequently, it was argued that foreign investment strategies should be analyzed as a set of strategic decisions managers make to formulate the best mix.

Originality/value

The empirical evidence for the first-mover advantage may not be as well grounded as many have thought. When the first-mover strategic decision is analyzed in isolation from other strategic variables, which is commonly done in many empirical studies, it indicates that firms that enter China before their competitors perform better. Unfortunately, it is more logical to assume that managers dynamically develop a set of strategic decisions that ultimately determine the firm’s performance. To extrapolate one static decision from the strategic decision set and make broad assertions about its effect of performance is an over-simplification of the strategic decision process.

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Journal of Asia Business Studies, vol. 8 no. 3
Type: Research Article
ISSN: 1558-7894

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Article
Publication date: 1 January 1985

Michael E. Porter

Technological innovations can have Important strategic implications for individual companies and can greatly influence industries as a whole. Yet, not all technological…

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Abstract

Technological innovations can have Important strategic implications for individual companies and can greatly influence industries as a whole. Yet, not all technological change is strategically beneficial. This article focuses on ways to recognize and exploit the competitive significance of change.

Details

Journal of Business Strategy, vol. 5 no. 3
Type: Research Article
ISSN: 0275-6668

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Article
Publication date: 11 March 2021

Kerri McBee-Black and Jung E. Ha-Brookshire

The goal of this study was to explore the development of the first-of-its-kind mainstream adaptive apparel line for children through the collaboration of an adaptive…

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125

Abstract

Purpose

The goal of this study was to explore the development of the first-of-its-kind mainstream adaptive apparel line for children through the collaboration of an adaptive apparel advocate and an apparel brand.

Design/methodology/approach

To achieve this goal, the study used the resource advantage (RA) and first-mover advantage theory to conduct a case study investigating the lived experiences of Mindy Scheier as she created the adaptive apparel movement and collaborated with Tommy Hilfiger® to launch the first-of-its-kind mainstream adaptive apparel line for children.

Findings

The result of the case study revealed two dominant themes: (1) “I am going to educate the entire industry” and (2) “You mean no mainstream brands have done this before?” Using RA theory and first-mover advantage theory, the themes illustrated the advocate's position as a key competitive resource, how she leveraged the key competitive resources with an apparel brand, and subsequently, how the brand, using the advocate as a key competitive resource, established a first-mover advantage in the adaptive apparel market to develop the first-of-its-kind mainstream adaptive apparel line for children in the marketplace.

Originality/value

This study demonstrated how RA theory could be applied to the partnership between an advocate and an apparel firm and how the key resources acquired and utilized by the advocate support a competitive advantage within the adaptive apparel marketplace.

Details

Journal of Fashion Marketing and Management: An International Journal, vol. ahead-of-print no. ahead-of-print
Type: Research Article
ISSN: 1361-2026

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Article
Publication date: 1 December 2003

Zillur Rahman and S.K. Bhattacharyya

The order of entry of a firm in a market is associated with its ability to create value. This paper suggests that it pays to be a first mover in an emerging market, the…

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Abstract

The order of entry of a firm in a market is associated with its ability to create value. This paper suggests that it pays to be a first mover in an emerging market, the darlings of 2001. It touches on the definition of an emerging market, discusses the importance of emerging markets in the global business and highlights how the infrastructure condition and consumer orientation in an emerging market favour a first mover. Finally, it recommends various strategies that a first mover should follow to have sustainable competitive advantages.

Details

European Business Review, vol. 15 no. 6
Type: Research Article
ISSN: 0955-534X

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Article
Publication date: 11 January 2016

Lynn A. Walter, Linda F. Edelman and Keneth J. Hatten

The purpose of this study is to examine how early-entry and process-based capability development affected firm survival during shakeout in the US brewing industry between…

Abstract

Purpose

The purpose of this study is to examine how early-entry and process-based capability development affected firm survival during shakeout in the US brewing industry between 1938 and 1980.

Design/methodology/approach

Hazard analysis was conducted on US brewing industry data spanning 42 years from 1938 to 1980.

Findings

Both early-entry and later capability developments enhance the probability of survival. In addition, firms which entered early were also more likely to be the firms who continually developed capabilities across the decades.

Research limitations/implications

This study contributes to our understanding of shakeout in traditional, non-high-technology businesses. However, because it is a single industry study, the ability to the generalize findings to other industry contexts is limited.

Practical implications

Early entry can determine survival in industries with stable products and low levels of technological change.

Social implications

Policy-makers interested in competitive dynamics should take note of the historical conditions that lead to industry consolidation in traditional industries, which, while not as glamorous as the technology sector, provide the core of US industry.

Originality/value

Historical firm characteristics can impact industry structure and firm survival for over a century.

Details

Journal of Management History, vol. 22 no. 1
Type: Research Article
ISSN: 1751-1348

Keywords

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