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Performance implications of core and complementary pre-entry experience: The role of consumer heterogeneity in mobile telephony

  • JP Eggers

    (NYU Stern School of Business)

  • Michal Grajek

    (ESMT European School of Management and Technology)

  • Tobias Kretschmer

    (LMU Munich)

We study how two distinct types of pre-entry experience – core technological experience and market-based complementary experience – affect post-entry performance in a new industry. We focus on the fit between capabilities generated through pre-entry experience and the preferences of heterogeneous consumer segments. Specifically, we suggest that firms with pre-entry experience in the focal technology will attract more valuable consumers, but as these consumers typically make adoption decisions early the firm must enter early to benefit. Conversely, firms with pre-entry experience in the focal market will attract a larger share of less valuable consumers regardless of entry timing. Our empirical analysis of the global 2G mobile telecommunications industry supports our theory and provides important insights for research on experience and entry dynamics in high-technology industries.

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File URL: http://static.esmt.org/publications/workingpapers/ESMT-11-03_R2.pdf
File Function: Revised version, 2012
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Paper provided by ESMT European School of Management and Technology in its series ESMT Research Working Papers with number ESMT-11-03 (R2).

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Length: 38 pages
Date of creation: 30 Mar 2011
Date of revision: 29 May 2012
Handle: RePEc:esm:wpaper:esmt-11-03
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  14. Slater, Stanley F. & Narver, John C., 2000. "The Positive Effect of a Market Orientation on Business Profitability: A Balanced Replication," Journal of Business Research, Elsevier, vol. 48(1), pages 69-73, April.
  15. Christina L. Brown & James M. Lattin, 1994. "Investigating the Relationship Between Time in Market and Pioneering Advantage," Management Science, INFORMS, vol. 40(10), pages 1361-1369, October.
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