The Role of Pre-Entry Experience, Entry Timing and Product Technology Strategies in Explaining Firm Survival
Management Science, Vol. 53, No. 12, pp. 1887-1902, 2007
33 Pages Posted: 24 Feb 2009
Date Written: December 1, 2007
Abstract
Studying the US personal computer industry from its inception in 1974 through 1994, we address the following questions. What product technology strategies increase the survival chances of entrants into new, technologically dynamic industries? Does the effectiveness of these strategies differ by pre-entry experience? Does the effectiveness of these strategies differ by when firms enter a new industry? Consistent with the published literature, we find that diversifying entrants have an initial survival advantage over entrepreneurial startups. But, we find the reverse for later entrants: startups that enter later in the industry have a survival advantage over the later entering diversifying entrants. We explain this finding in terms of the firms' product technology strategies (i.e., offering products based on the technology standard and products incorporating the latest technology), pre-entry experience, and entry timing. Our findings highlight that it is crucial to study what firms do after they enter a new industry in order to more completely understand their ultimate performance.
Keywords: Entrepreneurship, Strategy, Marketing, Personal Computer Industry
JEL Classification: M13, M31, O33, O32, L63
Suggested Citation: Suggested Citation
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