Zooming in or zooming out: Entrants' product portfolios in the nascent drone industry

Abstract

Faced with demand uncertainty and heterogeneity in a nascent industry, entrants often consider how many customer segments to serve by tailoring the usage breadth of their product portfolios. Portfolio usage breadth is the extent to which products in a portfolio collectively span distinct customer segments. We suggest that when entrants have use experience in contexts that are potential users of the new product, their portfolios exhibit low usage breadth, due to demand-oriented cognition and knowledge. The relationship is stronger for

Customers, Markets, and Five Archetypical Value Creation Logics: A Review of Demand-Side Research in Strategic Management

“…Being exposed to a diverse set of customers also has other benefits. Shermon and Moeen (2022) examine a similar situation in the drone industry. They show that new entrants whose executives have experience in a particular customer segment tend to focus their offering on a single segment, whereas those without such experience will begin with an offering that spans multiple segments.…”