The Competitive Dynamics of Entrepreneurial Market Entry
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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.
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Chapter 9: Market Niche Entry Decisions: A Retrospective Introduction

Henrich R. Greve

Extract

9. Market niche entry decisions: a retrospective introduction Henrich R. Greve “Market niche entry decisions” (Greve, 2000) was written as a contribution along two dimensions of market entry research. The first dimension concerned the mechanism(s) driving market entry, and was a contest between three perspectives: (1) the “pull” of pursuing opportunities; (2) the “push” of learning from past experiences, and (3) the “manoeuvring” of strategizing against competitors. Although all of these mechanisms could in principle operate at the same time, there are at least two implicit conflicts between them. First, learning theory is based on bounded rationality, and is often posed as a contrast to opportunity-based theory that requires better knowledge, and strategic theory that requires higher rationality. Second, strategy theory may call for entry into areas that are less promising opportunities in the short run, but sets up a better game against the competitors in the longer run. Hence, the mechanism dimension was a real contest rather than a contrived one. However, to take into account bounded rationality, the “pull” argument of pursuing opportunities relied on simple counts of competitor entries that assume only that managers view the entries of others as informative of their own opportunities (e.g., Greve, 1996). The second dimension concerned the difference between small and large organizations, which tested two interrelated arguments. First, the survivor bias will make small organizations appear to be more path-dependent in their entry decisions even if they follow the same learning rules. A small organization that still expands is...

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