Red Queen Competitive Imitation in the U.K. Mobile Phone Industry

Abstract

RED QUEEN COMPETITIVE IMITATION IN THE UK MOBILE PHONE INDUSTRYThis paper uses Red Queen competition theory to examine competitive imitation. We conceptualize imitative actions by a focal firm and their rivals along two dimensions: imitation scope, which describes the extent to which a firm imitates a wide range (as opposed to a narrow range) of new product technologies introduced by rivals, and imitation speed, namely the pace at which it imitates these technologies. We argue that focal firm imitation scope and imitation speed drive performance, as well as imitation scope and speed decisions by rivals, which in turn influence the focal firm performance. We also argue that the impact of this self-reinforcing Red Queen process on firms' actions and performance is contingent on levels of product technology heterogeneitydefined as the extent to which the industry has multiple designs resulting in product variety. We test our hypotheses using imitative actions by mobile phone vendors and their sales performance in the UK from 1997 to 2008. (Levitt, 1966: 38). INTRODUCTION "Once we become self-consciously aware that the possibilities of innovation within any one company are in some important ways limited, we quickly see that each organization is compelled by competition to look to imitation as one of its survival and growth strategies"The emergence of what has often been referred to as the "new economy" has greatly expanded research on the power of technological innovation to create competitive dynamics that can reshape industries (Baumol, 2004;Teece, 1998). While the focus on innovation as the engine of industry evolution reflects both the potential gains that accrue to first-movers (Lieberman & Montgomery, 1988), and the dramatic impact of disruptive technologies on the competitive landscape (Christensen & Bower, 1996), it inadvertently tends to eclipse the importance of imitation as an agent of change. Researchers that take a broader perspective see imitation as the twin process to innovation that, arguably like innovation, also plays a role in industry evolution in all contexts (Cohen & Levinthal, 1989;Levitt, 1966;Semadeni & Anderson, 2010), but takes on even greater significance in the rapidly changing technologyintensive industries that constitute the new economy. As Baumol (2004) 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43 44 45 46 47 48 49 50 51 52 53 54 55 56 57 58 59 60 technology -even if the technology is created by others -then its rivals can easily take the lead and make disastrous inroads into the slower firm's sales" (Baumol 2004: 246-247).Formulating an effective imitation strategy is a problem that confronts managers in any industry (Lieberman & Asaba, 2006), but in industries with rapid technological change the problem is compounded by higher levels of uncertainty about the market performance of new product technologies (Utterback & Suarez, 1993). This "technologic...

Risk-type preference shifts in response to performance feedback

“…Similarly, the emergence of technological and social trends that give rise to decision situations have been systematically documented for other purposes in the bicycle (Dowell and Swaminathan, 2006), cereal (Hitsch, 2006), radio (Greve, 1998) and software (Cottrell and Nault, 2004) markets, among others. And with the growing availability of more detailed datasets, studies of finer-grained choice sets, such as that of dozens of product dimensions in the handset industry (Giachetti et al, 2016; Klingebiel and Joseph, 2016), become feasible.…”

The Journey of Business Opportunity Evaluation: When and Why Does Opportunity Novelty Promote Vs. Inhibit Opportunity Adoption?

“…They pay more attention to current losses compared with future gains. New products or services generated from novel opportunities are often associated with lower market legitimacy and higher uncertainty because they deviate from existing products or services in the market (DiMaggio and Powell, 1983;Giachetti et al, 2017). Thus, entrepreneurs may perceive more uncertainty for novel opportunities (Mount et al, 2021), which in turn leads to more risk perception.…”

Red Queen Effect in German Bank Industry: Implication of Banking Digitalization for Open Innovation Dynamics

“…For example, when the three-blade disposable razor released by Gillette, Gillette's competitors also introduced a new blade razor that even progressed; four-blade [7]. Several prior studies have proved that firms' competitive dynamics could help them develop and grow [8][9][10]. Competition stimulates firm's change and development for their products and services.…”