Timing, order and durability of new product advantages with imitation

Abstract

This research examined the effects of timing, order and the durability of first mover advantages by analyzing the stock market reactions to new product introductions and imitations. The major findings are that both timing and order of moves are important and that rival reactions undermine the durability of first mover advantages. More specifically, (1) early and fast movers achieve greater gains than late and slow movers, and (2) first movers suffer at the time of new product imitations. Copyright © 2000 John Wiley & Sons, Ltd.

Competing in (and out of) transition economies

“…The new era of competition is formulated around accelerated interaction (Grimm, Lee, & Smith, 2006). Thus, the speed of decision-making and execution of competitive actions rises as a critical component of success (Baum & Wally, 2003;Lee et al, 2000). Finally, the number of competitive actions plays a significant role in addition to speed and effectiveness of competitive actions (Young, Smith, & Grimm, 1996).…”

Responding to Rivals and Complements: How Market Concentration Shapes Generational Product Innovation Strategy

“…The innovation studies literature directs particular attention to competitor innovations as events that will be relevant for GPI strategy (Lee et al 2000, Reinganum 1989) and hints at a second type of relevant event in the form of complementary innovations (Klevorick et al 1995, Teece 1986). Competitor innovation events center on interdependence in the form of innovation rivalry among competing products (Beath et al 1995).…”

“…As a baseline, organizations have incentives to respond to GPIs by marketplace rivals; otherwise, they may sacrifice profit opportunities, cede market share, and face heightened survival pressure (Lee et al 2000, Smith et al 2001. Although responses to rival innovations may take multiple forms, we focus on matching responses (i.e., responding to generational innovation with generational innovation).…”

“…Second, our study offers implications for the competitive rivalry literature in strategic management. Competitive rivalry research draws substantially from Schumpeterian (1934) theories of competitive dynamics and examines innovation introductions as central moves and countermoves (Lee et al 2000, Young et al 1996. Extant research argues that as concentration increases, competitive rivalry decreases, based on the logic that greater concentration decreases the incentives to compete aggressively and therefore businesses restrict investment in innovation to achieve higher profitability (Schomburg et al 1994, Smith et al 2001.…”

“…These events address two important domains for innovation strategy: the pattern of interactions with competitors and the pattern of interactions with other players within larger systems of complementary products and businesses. Competitor innovation has received some attention as a spur to innovation strategy in the economics of innovation literature and in studies of competitive rivalry (Lee et al 2000, Reinganum 1989). Complementary innovation, meanwhile, has received little attention to date; indeed, the activities of businesses producing complementary products are underemphasized elements of industry dynamics (Brandenburger and Nalebuff 1997).…”