Entry‐Timing Advantages in Renewable Natural Resources Industries

Abstract

In this paper, we explore the conditions of entry‐timing advantages in renewable natural resource industries. Drawing from behavioural theory of the firm, we classify firms in two groups depending on the different heuristics used to make entry decisions when facing the cyclical endogenous nature of these industries: crowd firms are procyclical, making decisions based on the current phase of the industry cycle, whereas anti‐crowd firms follow a countercyclical strategy, making uncertain, and risky decisions by estimation of the next phase of the cycle. Therefore, anti‐crowd firms anticipate the deployment of resources each cycle, potentially gaining entry‐timing advantages beyond those provided by traditional competitive isolating mechanisms. Through a mathematical simulation of a performance feedback model, we reveal that the entry‐timing advantage of the anti‐crowd group becomes possible when the rivalry in the industry and the price sensitivity of competitors are high, and when the time required to deploy the resources is short.

Conducting Management Research in Latin America: Why and What’s in It for You?

“…This is an even more pressing question for natural-resource industries, for which the cyclical nature of commodity prices makes entry timing a fundamental source of competitive advantage. Recent simulation results focusing on industries particularly relevant for Latin America uncovered the conditions under which entry timing in different markets leads to a sustainable competitive advantage in renewable-natural-resource industries (Mac Cawley, Sevil, Vassolo, & Sepulveda, 2019).…”

“…Despite initial studies on competition in natural-resource industries conducted by researchers from Latin America (Casarin et al, 2019; Cruz et al, 2019; Mac Cawley et al, 2019), large-scale empirical studies using data from the region are still needed. Research opportunities include fundamental questions about the determinants of a firm’s creation, survival, and growth in natural-resource industries and about innovation in sectors where the product is a commodity.…”

The Who, Where, What, How and When of Market Entry

“…The paper by Mac Cawley et al () expands the entry‐timing literature related to natural resources industries (NRI), by seeking to study the conditions and mechanisms which allow competitors in NRI to build entry‐timing advantages. This topic is important because traditional mechanisms that lead to entry‐timing advantages, such as radical product innovation or demand‐side isolating mechanisms, do not directly apply in NRI.…”

Sustainable Market Entry Strategy under a Supply Chain Environment

“…This paper can also be related to the literature on new technology industries' entry [8][9][10][11][12][13][14][15][16][17][18][19][20][21][22][23][24][25][26][27]. Yoo and Lee [8], when facing the Internet channel as a strategic choice for enterprises to enter the market, discussed how Internet channels affect the income of other channels, and analyzed the factors that influence Internet channels when entering new markets.…”

“…These documents focus on the market entry competition strategies and strategic influences of different companies offering same-sex products (laterally competitive companies). Cawley et al [10] discussed the mode of emerging renewable energy companies based on their time of entry. Makarevich and Kim [11] considered the impact of different contracts on firms' entry decisions under the uncertain factors of an enterprise focusing on a new market.…”