Time-oriented competitive strategies

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Under time-oriented competitive strategies are in business administration , particularly in strategic marketing and innovation management , strategies analyzed, which deal with the timing of the launch of (new) products. Opposing positions with regard to market entry are the pioneer strategy on the one hand and the follow-up strategy on the other.

Terms

  • In the case of pioneering companies ( English : First Mover or First for short ), a new product does not have a technically comparable competitor product at the time of its market launch. With a pioneering strategy, companies try to achieve a competitive advantage through early market launch (First Mover Advantage, FMA for short). Concrete examples of the pioneering strategy are the personal digital assistant “Newton” from Apple (1993) and the car anti-lock braking system from Bosch (1978).
  • A follow-up company (English: late mover or follower ) only comes onto the market after the pioneering company. A follow-up strategy aims at competitive advantages through a later market entry. Examples of companies as followers are IBM in the personal computer market (1981, competition with Apple II , 1977) and Siemens in the market for kidney stone smashers (1986, competition with Dornier's kidney stone smashers , 1980). Follow-up companies are often also categorized into:
    • Early versus late followers: Early followers start selling competing products relatively shortly after the pioneering company. Late followers only enter markets when technical and economic initial problems have been eliminated and a large number of suppliers already exist. However, according to Gerpott, objective delimitation criteria are hardly mentioned in the literature.
    • Imitating versus modifying followers: An imitating follower mimics the pioneering company's product innovation. Properties of the pioneering or original product are largely adopted. A modifying follower retains the product technology introduced by First , but offers a noticeably improved product itself.

Often, in the literature, not only the (very) first provider is distinguished from the followers as first, but early providers are distinguished from laggards (early movers versus late movers)

Opportunities of the pioneer strategy

A pioneering strategy can produce competitive advantages on both the supply and demand side:

  • Cost advantages and experience curve : Successful pioneers can achieve higher market shares and higher sales volumes. According to the experience curve concept, this can lead to lower unit costs. This can give rise to the possibility of a deterrent strategy through limit pricing (competitive prices) against inferences.
  • Securing scarce resources : pioneers can “occupy” resources early on and, in favorable cases, use them exclusively. Examples are long-term relationships with suppliers and trading partners.
  • Exploitation exclusivity through property rights : If the pioneer succeeds in protecting his new processes and products comprehensively with patents , he can keep followers away from the competition or benefit from license agreements .
  • Setting technological standards : Early providers have greater opportunities to influence the implementation of (quasi) standards.
  • Development of image advantages with customers : Innovative pioneers have the chance to gain reputation advantages ("technology pioneers" etc.).
  • Achieving higher prices : If pioneers as temporary “quasi-monopolists” meet the demand of early buyers with their products, relatively high sales prices can be achieved.

Follow-up strategy opportunities

The pioneering strategy does not necessarily lead to permanent market success. The success of successor companies often results with the risks that exist for pioneering companies:

  • Freerider effects : Followers can benefit from the pioneer's investments in market development, e.g. B. if the construction of a new infrastructure is necessary or if customers are skeptical about a new type of product must be eliminated.
  • Avoiding mistakes and cherry-picking : Followers can observe negative customer reactions and avoid mistakes by the pioneers. The strategy of successor companies to focus on markets that have proven attractive due to the activities of pioneering companies is known as cherry-picking.
  • Indolence of pioneers : Initially successful pioneers can become indolent and shy away from replacing the first successful product generations in good time. This gives (modifying) inferences a chance to overtake early market leaders.

Influence of the market situation

The chances of a pioneering strategy or the risks of a follow-up strategy depend on the specific market and competitive situation, but also on the product properties. The probability of success of a pioneering strategy increases, among other things ...

  • ... with a rapid drop in prices,
  • ... with a rapid diffusion process of the new product type,
  • ... with a short marketing period (short market cycle),
  • ... for already known customer groups for the new product,
  • ... with strong network effects ,
  • ... with a high technological product complexity.

Empirical results

In the 1970s and 1980s, the scientific discussion was dominated by empirical papers, most of which supported an advantage of the pioneering strategy. Above all, the studies by Tellis / Golder showed disadvantages of the pioneering strategy in the 1990s. A general favorability of pioneering strategy towards the follower strategy is therefore not given according Gerpott.

literature

  • BL Bayus, S. Jain, AG Rao: Too Little, Too Early: Introduction Timing and New Product Performance in the Personal Digital Assistant Industry. In: Journal of Marketing Research. 34, 2, 1997, pp. 50-63.
  • H. Billerbeck: The time factor in innovation management. Critical appreciation of the time-trap theorem and the resulting dominance of first strategies. Goettingen 2003.
  • W. Buchholz: Timing strategies - time-optimal design of the start of product development and market entry. In: Journal for Business Research. 50, 1, 1998, pp. 21-40.
  • M. Clement, T. Litfin, S. Vanini: Is the pioneering role a success factor? A critical analysis of the empirical research results. In: Journal for Business Administration. 68, 2, 1998, pp. 205-226.
  • E. v. One, HG Helmstädter: New products through cooperation. Eight case studies from business practice. Berlin 1997.
  • M. Fischer: Timing of the market launch of innovations. In: S. Albers, O. Gassmann (Hrsg.): Handbuch Technologie- und Innovationsmanagement. Wiesbaden 2005, pp. 397-414.
  • T. Frawley, J. Fahy: Rivistiting the First-Mover Advantage Theory. A Resource-Based Perspective. In: The Irish Journal of Management. 27, 1, 2006, pp. 273-295.
  • TJ Gerpott: Strategic technology and innovation management. 2nd Edition. Stuttgart 2005.
  • MB Lieberman, DB Montgomery: First-Mover Advantages. In: Strategic Management Journal. 9, 1988, Special Issue, pp. 41-58.
  • W. Pfeiffer, E. Weiss: Technology-Oriented Competitive Strategies. In: H. Corsten (Ed.): Handbuch Produktionsmanagement. Strategy - leadership - technology - interfaces. Wiesbaden 1994, pp. 275-291.
  • V. Shankar, GS Carpenter, L. Krishamurthi: Late Mover Advantage: How Innovative Late Entrants Outsell Pioneers. In: Journal of Marketing Research. 35, 1, 1998, pp. 54-70.
  • F. Suarez, G. Lanzolla: The Half-Truth of First-Mover Advantage. In: Harvard Business Review. 83, 4, 2005, pp. 121-127.
  • GJ Tellis, PN Golder: Will and Vision. How Latecomers Grow to Dominate Markets. New York et al. 2002.
  • V. Trommsdorff, F. Steinhoff: Innovation Marketing. Munich 2007.
  • K.-I. Voigt: Strategies in the time competition. Technology management and marketing options. Wiesbaden 1998.
  • S. Wettengl: HM3 - The most expensive bathtub in the world. Blog entry at: Wettengl.info / Wettengl.info Wettengl.info

Individual evidence

  1. ↑ See Voigt (1998), p. 93. The development and presentation of prototypes, e.g. B. So-called "studies" in the automotive industry, does not turn a company into a pioneering company, since in these cases there is (still) no market.
  2. ↑ See Bayus, Jain, Rao (1997).
  3. ^ See one, Helmstädter (1997).
  4. ↑ See Clement, Litfin, Vanini (1998), p. 206.
  5. ↑ See Wettengl (2011) and Pfeiffer / Weiß (1994), p. 289.
  6. ↑ See Gerpott (2005), p. 218 and Voigt (1998), p. 93.
  7. ↑ See Buchholz (1998), p. 25.
  8. ↑ See e.g. B. Cho, Kim, Rhee (1998), p. 490.
  9. ↑ On the opportunities offered by a pioneering strategy, see Fischer (2005), pp. 401–405; Lieberman / Montgomery (1988), pp. 41-47; Gerpott (2005), p. 221 f.
  10. ↑ See Fischer (2005), p. 405.
  11. ↑ On the opportunities offered by a follow-up strategy cf. Tellis / Golder (2002); Fischer (2005), p. 405 f .; Lieberman / Montgomery (1988), pp. 47-49; Gerpott (2005), p. 221 f.
  12. ↑ See Lieberman / Montgomery (1988), p. 48.
  13. ↑ See Suarez, Lanzolla (2005) and Gerpott (2005), p. 226 ff.
  14. ↑ On the historical development of the first mover discussion, see Frawley / Fahy (2006), p. 275 ff. Overviews of empirical studies are provided by Billerbeck (2003), p. 27 ff. And Clement / Litfin / Vanini (1998), P. 211 ff.
  15. ↑ See Tellis, Golder (2002).
  16. ↑ See Gerpott (2005), p. 225.