Perfect Timing? Dominant Category, Dominant Design, and the Window of Opportunity for Firm Entry
Strategic Management Journal, Forthcoming
28 Pages Posted: 4 Dec 2013 Last revised: 14 Jan 2014
Date Written: 2013
Determining the optimal time for firms to enter emerging industries has long been a key concern in strategy, yet scholars still struggle to create a theoretical foundation that can fully integrate the empirical findings within this area. We incorporate categorical dynamics into the theory of the industry life cycle to complement and enhance the predictive power of the existing theories of entry timing. In addition, we introduce the concept of a dominant category — the conceptual schema that most stakeholders adhere to when referring to products that address similar needs and compete for the same market space — and link this concept to the emergence of the dominant technological design. From this framework, we develop a set of propositions that relate the emergence of the dominant category to entry-timing advantages and firm performance. In particular, we propose the existence of a window of opportunity (i.e., an optimal time for firm entry) that starts with the emergence of the dominant category and ends with the emergence of the dominant design. We discuss the implications of categorical dynamics for our understanding of entry-timing advantages and explore the influence of industry contexts in the emergence of the dominant category.
Keywords: Entry timing advantages, categories, first mover advantage, industry life cycle, dominant design
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