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.

Chapter 4: ‘It’s Not About the Beer, Really’

Glenn R. Carroll and Anand Swaminathan

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

Extract

4. “It’s not about the beer, really” Glenn R. Carroll Many organizational theorists started studying complete organizational populations in the 1980s and 1990s. In attempting to document and record the initial founding periods of populations, analysts conducting these studies often found themselves challenged by what they commonly regarded as novel “coding” problems. The coding problems occurred because the early entrants to a population often look and act very differently from each other, and bear little resemblance from the arch-typical firms that later characterized the population’s organizational form. (In our historical automobile study [Bigelow et al. 1997; Hannan et al. 1998a, 1998b] I recall a prototype for a flying car with wings!) In short, in the periods of formation, it is difficult to discriminate the “real” firms from others and to know which of these entities are actually part of the population or something else. Practical-minded researchers (including me and most of my colleagues) develop objective coding rules to deal with these ambiguities; we then proceed to compile data and conduct analyses. This practical approach generated much comparable research on organizational populations and produced rapid theoretical and empirical progress in the 1980s and 1990s (for a review see Carroll and Hannan 2000). Only much later, did analysts realize that the approach was often sweeping under the rug very interesting and potentially important phenomena associated with industry origins, innovation, and entrepreneurship. That is, the messy and confusing pictures we saw of early entrepreneurs and organizations operating in a new technological or social...

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