Competitive Dynamics of Market Entry. Scale and Survival Abstract: Market entry is the essence of strategy and is largely viewed as a dichotomous event: entry or no entry. What has not been acknowledged is the uniqueness of each market entry. Our study highlights the scale of market entry in the context of multipoint competition. We assert that entry scale varies based on the risk of market incumbent retaliation. Theory suggests that when risk associated with retaliation are low, firms enter with large scale and when associated risks are high, firms enter with low scale. Further, survival is viewed as dependent on following theory. We argue and find supporting evidence that firms behave in the opposite manner and do so to their own benefit, thereby revealing a unique discrepancy between theory and practice among 75 product market entries by 27 firms

Upson, John W.; Sanchez, Mariana S.; Smith, William J.

Competitive Dynamics of Market Entry. Scale and Survival Abstract: Market entry is the essence of strategy and is largely viewed as a dichotomous event: entry or no entry. What has not been acknowledged is the uniqueness of each market entry. Our study highlights the scale of market entry in the context of multipoint competition. We assert that entry scale varies based on the risk of market incumbent retaliation. Theory suggests that when risk associated with retaliation are low, firms enter with large scale and when associated risks are high, firms enter with low scale. Further, survival is viewed as dependent on following theory. We argue and find supporting evidence that firms behave in the opposite manner and do so to their own benefit, thereby revealing a unique discrepancy between theory and practice among 75 product market entries by 27 firms

John W. Upson (), Mariana S. Sanchez () and William J. Smith ()
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John W. Upson: University of West Georgia, USA
Mariana S. Sanchez: University of West Georgia, USA
William J. Smith: University of West Georgia, USA

Management and Economics Review, 2017, vol. 2, issue 1, 118-132

Keywords: Market entry; competitive dynamics; multipoint competition; survival analysis. (search for similar items in EconPapers)
JEL-codes: M10 (search for similar items in EconPapers)
Date: 2017
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