Competitive Imitation Strategy for New Product-Market Success

Abstract

Imitation is a viable strategic choice for potential market entrants, but not all imitations help the entrants gain competitive advantages or lead to success in the new product market. This study proposes a competitive imitation strategy for a new product market by which an imitator may achieve superior performance. This imitation strategy is framed in a sequence that links a market entrant’s purposeful imitation of its competitors to its efforts of developing differentiated products and mobilizing entry resources, which should ultimately lead to new product success. We test our conceptual framework with survey data of South Korean enterprises. The empirical results demonstrate that a mere imitation of competitors’ moves for new products doesn’t yield any abnormal returns unless the imitation is mediated by the firm’s development of differentiated new products and mobilization of existing entry resources. A summary managerial implication is that imitation can be a winning strategy when firms actively imitate during new product development and capitalize on the related advantages, for example, offer a differentiated product with the full utilization of their endowed entry resources.