Survivor market

Survivor market gy ricatto ,qexaúpR 02, 2010 3 pagos Survival in Markets with Network Effects: Product Compatibility and Order-of-Entry Effects published 7/112010 Author: Qi Wang, Yubo Chen, & Jinhong Xie Executive Summary Firms competing in markets with network effects often encounter overwhelmingly high market uncertainty and innovation risk, so survival is a crucial performance concern for new products in these markets.

In this study, the authors suggest that a pioneers survival (dis)advantage is jointly affected by network effects and two types of roduct com atibili : cross-generation (compatibility with pr rg generation (compati y to View nut*ge generation). Using data from 45 of pioneer supu’ival a cts) and within- ‘n the same systematic patterns two types of compatibility. Despite the Iower average survival duration of pioneers than their early followers in these markets, the study finds that pioneers can have a survival advantage in markets with both strong and weak network effects; however, the two cases requlre opposite compatibility conditions.

Specifically, when the products are cross-generation compatible but within-generation incompatible, a pioneer has a survival disadvantage relative o early followers in markets with very weak network effects; however, a pioneer has a survival advantage in markets with very strong network effects. When the products are cross-generation incompatible but within-generation compatible, the results are reversed: A pioneer has a survival advantage in mar Swlpe to vlew nexr page markets with weak network effects but a disadvantage in markets With strong network effects.

These findings provide some useful insights into a firm’s entry decision in markets with network effects. Conventional wisdom emphasizes the importance of being first in arkets influenced by network effects to benefit from a positive installed base. These findings reveal a Iower average survival duration of pioneers than their early followers in such markets. More important, these results show that though, on average, pioneers have a higher failure rate than their early followers in markets with network effects, opportunities exist for pioneers to enjoy a survival advantage in markets with both strong and weak network effects.

Biography Qi Wang is Assistant Professor of Marketing at the State University of New York at Binghamton. She received her PhD n Marketing from the University of Florida in August 2005. Her primary research focuses on competitive marketing strategies in markets with standards competition and network effects, the impacts of social interactions on consumer behaviors and marketing strategies, and the impacts of marketing strategies on flrm and product sumval.

Yubo Chen is Assistant Professor of Marketing in the Eller College of Management at the University of Arizona. He received his PhD in Marketing from the University of Florida. His research investigates haw social interactions among stakeholders is hanging the landscape of marketing strategy and how to use market forces to address social and developmental issues, such as sustainabiliry and corporate social responsibllity. His research has been published in such as sustainability and corporate social responsibility.

His research has been published in Journal of Marketing, Management Science, Marketing Science, Marketing Letters, and IEEE Intelllgent Systems. He is a finalist of INFORMS Frank M. Bass best dissertation paper award. Professor Chen is a recipient of various college-level and university-level teaching awards and ecognitions. Jinhong Xie is Etheridge Professor of International Business and Professor of Marketing in the Warrington College of Business Administration at the University of Florida.

She holds a PhD in Engineering and Public Policy from Carnegie Mellon University. She is a recipient of the INFORMSJohn D. C. Little gest Paper Award, the Marketing Science Institute’s Research Competition Award, the Product Development and Management Association’ Research Competition Award, and the University of Florida’s TIP Teaching Award. Her research interests include innovative ervice strategies, network effects and standards competition, consumer social interactions, innovation management, and cross- culture effects.

Her research has been published in Marketing Science, Management Science, Journal of Marketing Research, Journal of Marketing Journal of Product Innovation Management, Journal of Service Research, California Management Review, and International Journal of Research in Marketing among other journals. She has served as associate editor of Management Science and area editor of Marketing Science. Journal of Marketing, Volume 74, Number 4, July 2010 View Table of Contents 31_1f3