Entry Strategy for Nascent Industries: Introduction to a Virtual Special Issue

• Date: 01 February 2021
• DOI: http://doi.org/10.1002/smj.2994
• Published date: 01 February 2021

Entry Strategy for Nascent Industries: Introduction to a Virtual Special Issue

JP Eggers, New York University

Mahka Moeen, University of North Carolina

Introduction

The inherent uncertainty pervading nascent industries – uncertainty that includes

technology, competition, and customers – makes otherwise simple decisions difficult and

complex. Despite this uncertainty, managers typically cannot afford to ignore nascent

industries. Some new industries will fail to emerge, but some will either replace existing

industries (e.g., personal computers) or offer enormous opportunities for expansion (e.g.,

mobile networks and biotechnology). This suggests that the key decisions facing managers

around nascent industries are especially important for both industry emergence and firm

strategy. Within nascent industries, an intertwined set of decisions comprise organizational

overall entry strategy: whether and when to enter, which technological designs to adopt, and

how to collaborate with other actors. This Virtual Special Issue includes a selection of papers

published in Strategic Management Journal and Strategic Entrepreneurship Journal examining

the intersection of firm entry strategy and nascent industry emergence.

An industry's nascent period starts with the incubation stage and ends with early signs of

commercial viability at the point of industry sales takeoff. Incubation denotes the period before

the first product commercialization, during which technological investments may shape

industry knowledge bases (Moeen & Agarwal, 2017). After product commercialization, a period

of rapid firm entry and ensuing modest increase in product sales begins (Gort & Klepper, 1982).

During this period, with the alternative name of era of ferment, experimentation with

alternative product designs set the stage for possible emergence of a dominant design

(Abernathy & Utterback, 1978; Anderson & Tushman, 1990). As firms match product features

with a wide range of customer preferences (Adner & Levinthal, 2001; Agarwal & Bayus, 2002),

reduce prices (Golder & Tellis, 1997), and build social legitimacy (Wry, Lounsbury & Glynn,

2011), a distinct and large increase in product sales marks industry sales takeoff and

commercial viability. Figure 1 illustrates these stages and distinguishes the nascent stages from

subsequent stages.

This article is protected by copyright. All rights reserved.

This article has been accepted for publication and undergone full peer review but has not been

through the copyediting, typesetting, pagination and proofreading process which may lead to

differences between this version and the Version of Record. Please cite this article as doi:

10.1002/smj.2994