Summary Entry Timing: Enduring Lessons and Future Directions (Zachary, Gianiodis, Payne, Markman)

Entry Timing: Enduring Lessons and Future Directons
Zachary, Gianiodis, Payne & Markman

Entry choices are complex decisions because they ofen refect a shif in strategy, operatons or
business model and entail a lot of uncertainty. This artcle integrates and translates the lessons of
entry-tming research for wider consumpton.

Twenty-Five Years of Research on Entry Timing
The review was arranged around three
key themes:
 The outcomes or consequences
of entry-tming decisions and
actons;
 The antecedents of entry tming;
 The contngencies that infuence
these two main relatonships.


Entry-Timing Consequences
Firm-Level Research
First-mover advantage (FMA) is the main, and most supported, perspectve to examine relatonships
between early entry and frm-level outcomes for three reasons:
 Resource-capability mix: acquire resources and develop capabilites;
 Isolating mechainism: technology leadership, switching costs, strong positon, patents;
 Cointextual cointingeincies: industry and environmental factors.

Advantages for the frm can be based on:
 Performance: market share, proftability, frm value;
 Compettve advantages: resource acquisiton, market positon, cost advantages.

However, many of the explanatons for why early movers achieve beter outcomes (resource-
capability mix, isolatng mechanisms and contextual contngencies) are also used to explain why later
entrants ofen outperform frst movers.

Product-Level Research
Also, on product-level, frst-mover advantage seemed to give benefts to early movers, commonly
based on consumer preferences:
 Entrants that atract customers early can infuence how product atributes are valued;
 Consumers see pioneers as authentc, innovatve and trustworthy (lower uncertainty);
 Acquire scarce product placement (locatons) and exclusive access to customers;
 Gain greater product-market knowledge by learning efects;

However, later entrants have more tme to acquire informaton about compettors, suppliers and
trends and they can choose who to compete with or where to diferentate.

, Antecedents to Entry Timing
Firm-Level Research
Entry-tming decisions are infuenced by:
 Resource advaintage: inital capabilites afect entry tming through the development of later
capabilites. A frm with greater intrinsic speed capabilites can wait longer to enter an
emerging industry without signifcant negatve consequences;
 Einviroinmeintal coinditoins / strategic iinteint: industry characteristcs (growth opportunites
and uncertainty) act as antecedents to entry tming. High growth potental outweighs
delayed entry, even at high levels of uncertainty;
 Rival actoins: just copying rivals’ actons can lead to a bandwagon efect;
 Market size, stage of developmeint, opportuinites aind risks aind compettve behaviour.

Product-Level Research
 Game theory (entry decisions are based on rivals’ behaviour and the strength of competng
products): the unavailability of informaton regarding a frst mover’s products increases the
follower’s beneft on delaying entry;
 Liine extension: a line extension lowers per unit proft margins while dragging proft down of
existng products, but it may also help to expand the market and increase sales growth.

Contngencies
Contngencies moderate the relatonships between antecedents and outcomes.

Cointingeincies: The Relatoinships Beetweein Eintry Timiing aind Outcomes
There are diferent types of contngencies:
 Product atributes (product line breath, customer synergies, product imitaton by
compettors): the combinaton of the strength of the brand, early entry, frm size and
marketng competencies, is positvely associated with the success of a line extension;
 Firm atributes (resources, capabilites, size, structure, marketng expenditures, strategic
orientaton): R&D and marketng capabilites are the strongest moderators of the entry
tming–tto–tperformance relatonship;
 Iindustry atributes (market uncertainty, industry pace of change, competton): products
spread faster in countries that are culturally and economically similar to the frst country
being entered.

Cointingeincies: The Relatoinship Beetweein Aiintecedeints aind Eintry Timiing
 The relatonship between frms’ compettve insights and entry-tming decisions is moderated
by market estmates and development efciencies;
 Firms with speed capabilites can wait longer before entering a market, allowing tme for
uncertainty to decrease while avoiding risks;