Market Pioneer and Early Follower Survival Risks: A Contingency Analysis of Really New Versus Incrementally New Product-Markets

Abstract

Does the first entrant in a new market have a difficult time surviving or do first-mover advantages provide protection from outright failure? Our empirical study of 264 new industrial product-markets yields insights into this controversial research topic. The key data analysis insights arise by comparing survival risks in markets that were started with a really new product versus an incremental innovation. When the pioneer starts a new market with a really new product, it can be a major challenge just to survive. In contrast, in markets started by an incremental innovation, market pioneer survival risks are much lower. Interestingly, early followers have the same survival risk across both types of markets. Overall, these results indicate that in markets started by a really new product, the first to market is often the first to fail. In contrast, in markets started by an incremental innovation, it appears that first-mover advantages protect the pioneer from outright failure.

From Streets to Suites: How the Anti- Biotech Movement Affected German Pharmaceutical Firms

“…One prominent explanation is that corporations' success may depend on their timing of entry-early movers have an advantage due to intellectual property protection and dominant technological designs (Suarez and Lanzolla 2007;Tushman and Rosenkopf 1992). Others suggest that pioneers bear the cost of the general ferment associated with early technologies, so their success rate is lower (Min, Kalwani, and Robinson 2006). One such "market externality" could be attention from activists.…”

Ketepatan dan Kesalahan Persepsi Konsumen Terhadap Pionir dan Pemimpin Pasar

“…Riset Golder dan Tellis (1993) dan Schnaars (1994) menunjukkan dengan gamblang bahwa banyak di antara pionir yang berguguran. Dari total 212 perusahaan yang memasarkan produk yang benar-benar baru, 66 di antaranya adalah pionir, dan hanya 23%-nya saja yang mampu bertahan selama kurang lebih 12 tahun, namun pada pionir yang memulai sebuah pasar baru disertai peningkatan inovasi dapat bertahan selama kurang lebih 12 belas tahun sebanyak 61% (Min et al 2006). Trout (2001) mengingatkan bahwa kesuksesan dapat menimbulkan arogansi sehingga perusahaan menjadi kurang objektif, terlalu cepat puas diri, dan meremehkan kemajuan pesaing.…”

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