Zooming In or Zooming Out: Entrants' Product Portfolios in the Nascent Drone Industry

54 Pages Posted: 5 Nov 2020

See all articles by Anavir Shermon

Anavir Shermon

University of North Carolina (UNC) at Chapel Hill - Kenan-Flagler Business School

Mahka Moeen

University of North Carolina (UNC) at Chapel Hill - Kenan-Flagler Business School

Date Written: October 28, 2020

Abstract

Faced with demand uncertainty in a nascent industry, entrants often consider which customer segments to serve by tailoring the usage breadth and coherence of their product portfolios. Portfolios have high or low usage breadth, which is the extent to which they target customers in many segments, and high or low coherence, which measures how much the portfolios’ products overlap in targeted customer segments. We suggest that when entrants have prior use experience in contexts that are potential users of the new product, their portfolios exhibit low usage breadth and high coherence, due to demand-oriented cognition and knowledge. The relationship is moderated by whether they are startups or diversifying entrants and their business model at entry. The empirical context is the U.S. commercial drone industry.

Keywords: nascent industries, pre-entry experience, user innovation, product portfolios

Suggested Citation

Shermon, Anavir and Moeen, Mahka, Zooming In or Zooming Out: Entrants' Product Portfolios in the Nascent Drone Industry (October 28, 2020). Kenan Institute of Private Enterprise Research Paper No. 20-12, Available at SSRN: https://ssrn.com/abstract=3720370 or http://dx.doi.org/10.2139/ssrn.3720370

Anavir Shermon

University of North Carolina (UNC) at Chapel Hill - Kenan-Flagler Business School ( email )

McColl Building
Chapel Hill, NC 27599-3490
United States

HOME PAGE: http://anavirshermon.com

Mahka Moeen (Contact Author)

University of North Carolina (UNC) at Chapel Hill - Kenan-Flagler Business School ( email )

McColl Building
Chapel Hill, NC 27599-3490
United States

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