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Fast-Mover Advantages: Speed Capabilities and Entry into the Emerging Submarket of Atlantic Basin LNG

Hawk, A., G. Pacheco-de-Almeida, B. Yeung. 2013. Fast-Mover Advantages: Speed Capabilities and Entry into the Emerging Submarket of Atlantic Basin LNG. Strategic Management Journal Forthcoming

HEC Paris Research Paper No. SPE-2017-1197

40 Pages Posted: 19 Jan 2012 Last revised: 24 Mar 2017

Ashton Hawk

Ohio State University (OSU) - Fisher College of Business

Gonçalo Pacheco-de-Almeida

HEC Paris - Strategy & Business Policy

Bernard Yin Yeung

National University of Singapore - Business School

Date Written: January 19, 2012

Abstract

Studies on market entry focus on the tradeoff between commitment and flexibility: early entrants face less competition but risk costly mistakes due to limited information, whereas late entrants can benefit from information revelation and learning opportunities but risk high costs from preemption. These entry timing benefits and costs typically vary with firms’ capabilities. In this study, we empirically examine the relationship between firms’ intrinsic speed capabilities and entry timing. Speed capabilities refer to firms’ ability to execute the process of entering a new market faster than competitors when market entry is time-consuming. Since firms with intrinsic speed capabilities can complete entry faster, they face low preemption risks. The implication is that faster firms can afford to wait longer for uncertainty resolution before deciding to enter new markets than slower firms. This hypothesis is more applicable when investment is associated with higher levels of commitment and thus greater option value of waiting. A related implication is that late entrants with intrinsic speed capabilities should have greater expected post-entry performance. We find support for these hypotheses by examining the entry timing and entry performance of firms in the Atlantic Basin liquefied natural gas (LNG) industry from 1996 to 2007.

Keywords: Firm Capabilities, First Mover Advantages, New Market Entry, Strategy Dynamics, Speed, Project Management

Suggested Citation

Hawk, Ashton and Pacheco-de-Almeida, Gonçalo and Yeung, Bernard Yin, Fast-Mover Advantages: Speed Capabilities and Entry into the Emerging Submarket of Atlantic Basin LNG (January 19, 2012). Hawk, A., G. Pacheco-de-Almeida, B. Yeung. 2013. Fast-Mover Advantages: Speed Capabilities and Entry into the Emerging Submarket of Atlantic Basin LNG. Strategic Management Journal Forthcoming; HEC Paris Research Paper No. SPE-2017-1197. Available at SSRN: https://ssrn.com/abstract=1988143 or http://dx.doi.org/10.2139/ssrn.1988143

Ashton Hawk

Ohio State University (OSU) - Fisher College of Business ( email )

2100 Neil Avenue
Columbus, OH 43210-1144
United States

Gonçalo Pacheco-de-Almeida (Contact Author)

HEC Paris - Strategy & Business Policy ( email )

Jouy-en-Josas Cedex, 78351
France
(+33) (0)1 39 67 97 62 (Phone)

HOME PAGE: http://www.hec.edu/Faculty-Research/Faculty-Directory/PACHECO-DE-ALMEIDA-Goncalo

Bernard Yin Yeung

National University of Singapore - Business School ( email )

15 Kent Ridge Drive
BIZ 1 Level 6
Singapore, 119245
Singapore
65 6516 3075 (Phone)
65 6779 1365 (Fax)

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