Imitative market entry strategies : the role of strategic orientation, resources, capabilities and absorptive capacity

• Main Author: Ahmad Husairi, Mariyani
• Published: Cardiff University 2014
• Subjects: 658.8; HF Commerce
• Online Access: http://ethos.bl.uk/OrderDetails.do?uin=uk.bl.ethos.649439

Despite being more common than innovation, little is known about the strategies involved in imitative market entries and the capabilities enabling their executions. Drawing on the Resource-based View and Competitive Dynamics perspectives, the study examines the role of marketing capability, technological capability and absorptive capacity in aiding technological firms to engage in successful imitative market entries. The research also examines the relationship between strategic types and resources as well as the relationship between resources and capabilities. Finally, the research investigates the role of capabilities as determinants of entry timing, relative product advantage and relative price, which in turn influence product performance. The research provides important managerial and theoretical implications. First, the integration of the RBV and Competitive Dynamics perspectives provides a richer explanation of the heterogeneity in firms’ performance. Second, the findings show that firms’ strategic orientation determines the level of marketing and R&D resources. Third, the interaction between technological capability and marketing capability accelerates imitative market entry. Fourth, technological and marketing capabilities have a U-shaped relationship with market entry. Finally, the present study found marginal support for the prediction that entry timing, relative product advantage and relative price increase the likelihood of product survival. The U-shaped relationship observed between technological and marketing capabilities with market entry illustrate the double-edged sword nature of capabilities. Although strong technological and marketing capabilities facilitate firms’ swift entry into the market for some, for others they may cause them to be trapped in existing product, lock them in with existing customers and prevent them from being receptive to the new opportunities in the environment. Finally, because marketing and technological capability interaction is significantly related to earlier entry and earlier entry is associated with a higher product survival rate, managers considering an imitative market entry need to invest in the development of these two capabilities.