The determinants of entry timing and performance in emerging markets

Timothy Scott Schoenecker, Purdue University

Abstract

This dissertation attempted to answer two fundamental strategic questions: (1) why do existing firms enter new markets when they do? and (2) how is post entry performance affected by entry timing? Two submarkets of the computer industry, minicomputers and personal computers, formed the empirical setting for the study. Entry timing for a particular firm was measured as the number of months between the time that the firm entered the market and time that the initial entrant pioneered that market. Performance was measured by the entrant's market share one, three, and seven years after entry. Ten hypotheses were developed that related different firm characteristics to entry timing and entry timing's effect on performance. Besides prior research on entry timing and performance, justification for these hypotheses was drawn from theoretical work on first mover advantages and the resource based view of the firm. A multiple regression model was used to test these hypotheses. One of the key findings of the research was the vast difference in the ability of the model to explain entry timing in each of the submarkets. In the minicomputer submarket, strong relationships between a firm's technological resources and its possession of a direct sales force were shown to reduce entry lag. No organizational factors were found to be systematically related to entry timing in the personal computer market. Additionally, as expected, entry timing was found to have a differential effect on performance across submarkets.

Degree

Ph.D.

Advisors

Cooper, Purdue University.

Subject Area

Management|Business community

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