Performance Implications of Core and Complementary Pre-Entry Experience: The Role of Consumer Heterogeneity in Mobile Telephony

44 Pages Posted: 6 Apr 2011 Last revised: 9 Sep 2014

See all articles by J. P. Eggers

J. P. Eggers

New York University (NYU) - Leonard N. Stern School of Business

Michal Grajek

ESMT European School of Management and Technology

Tobias Kretschmer

Ludwig Maximilian University of Munich - Faculty of Business Administration (Munich School of Management); Centre for Economic Policy Research (CEPR)

Date Written: May 29, 2012

Abstract

We study how two distinct types of pre-entry experience – core technological experience and market-based complementary experience – affect post-entry performance in a new industry. We focus on the fit between capabilities generated through pre-entry experience and the preferences of heterogeneous consumer segments. Specifically, we suggest that firms with pre-entry experience in the focal technology will attract more valuable consumers, but as these consumers typically make adoption decisions early the firm must enter early to benefit. Conversely, firms with pre-entry experience in the focal market will attract a larger share of less valuable consumers regardless of entry timing. Our empirical analysis of the global 2G mobile telecommunications industry supports our theory and provides important insights for research on experience and entry dynamics in high-technology industries.

Keywords: pre-entry experience, mobile telecommunications, consumer segments, complementary assets, core technical knowledge

JEL Classification: C51, L10, O33

Suggested Citation

Eggers, J. P. and Grajek, Michal and Kretschmer, Tobias, Performance Implications of Core and Complementary Pre-Entry Experience: The Role of Consumer Heterogeneity in Mobile Telephony (May 29, 2012). ESMT Working Paper No. 11-03 (R2). Available at SSRN: https://ssrn.com/abstract=1799191 or http://dx.doi.org/10.2139/ssrn.1799191

J. P. Eggers

New York University (NYU) - Leonard N. Stern School of Business ( email )

44 West 4th Street
Suite 9-160
New York, NY NY 10012
United States

Michal Grajek (Contact Author)

ESMT European School of Management and Technology ( email )

Schlossplatz 1
Berlin, 10178
Germany

Tobias Kretschmer

Ludwig Maximilian University of Munich - Faculty of Business Administration (Munich School of Management) ( email )

Kaulbachstr. 45
Munich, DE 80539
Germany

Centre for Economic Policy Research (CEPR) ( email )

London
United Kingdom

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