The Competitive Dynamics of Entrepreneurial Market Entry

The Competitive Dynamics of Entrepreneurial Market Entry

The Johns Hopkins University series on Entrepreneurship

Edited by Gideon D. Markman and Phillip H. Phan

Research on general market entry usually focuses on large enterprises. Often, however, small entrants can alter the competitive dynamics of an industry. This volume brings together the most prominent thought leaders and the best research on the asymmetric entrant-incumbent dynamics. The ideas presented offer a more nuanced perspective on how, when, where and with what consequences small, single-product firms enter markets that are dominated by large, multiproduct and multimarket incumbents.


Phillip H. Phan and Gideon D. Markman

Subjects: business and management, entrepreneurship, economics and finance, industrial economics


Phillip H. Phan and Gideon D. Markman The intersection between competitive dynamics, market entry, and entrepreneurship is an important area of research. Entrepreneurship scholars have focused their early efforts on understanding entrepreneurs and their decisions. Nowhere is this more evident than the decision to enter a new market. However, we are still way off from a thorough understanding of the marketplace dynamics triggered by such a decision. The purpose of this book is to bring the research on competitive dynamics to bear on the problem of market entry by entrepreneurial entities so that we can better understand its antecedents and effects. Over 80 years ago, Harold Hotelling noted that because of “an undue tendency for competitors to imitate each other in quality of goods, in location, and in other essential ways” (1929: 41), firms tend to selforganize into homogeneous clusters where they offer similar products to similar consumers.1 Others, however, noted that de novo entrants tend to introduce competing offerings and shift buyers’ preferences, thus eroding incumbents’ performance and stirring market heterogeneity (Kirzner, 1997; Schumpeter, 1934, 1942). Also, competitive dynamics theory explains that equilibrium is threatened and industry logic is disrupted once incumbents retaliate against entrants. Indeed, when entrants displace underperforming players, they bring about an industry change, thus motivating the remaining incumbents to fight, retreat, or collaborate (Carmeli and Markman, 2010; Gruca et al., 1992). Our book, about the intersection between competitive dynamics, market entry, and entrepreneurship, aims to shed light on and bring additional attention to several lacunae....