Perfect timing? Dominant category, dominant design, and the window of opportunity for firm entry

• Published date: 01 March 2015
• Date: 01 March 2015
• DOI: http://doi.org/10.1002/smj.2225

Strategic Management Journal

Strat. Mgmt. J.,36: 437– 448 (2015)

Published online EarlyView 6 February 2014 in Wiley Online Library (wileyonlinelibrary.com) DOI: 10.1002/smj.2225

Received 16 January 2012;Final revision received 15 August 2013

PERFECT TIMING? DOMINANT CATEGORY,

DOMINANT DESIGN, AND THE WINDOW

OF OPPORTUNITY FOR FIRM ENTRY

FERNANDO F. SUAREZ,1*STINE GRODAL,1and

ALEKSIOS GOTSOPOULOS2

1

Strategy and Innovation Department, Boston University School of Management,

Boston, Massachusetts, U.S.A.

2

SKK Graduate School of Business, Sungkyunkwan University, Seoul, Korea

The optimal time to enter emerging industries is a key concern in strategy, yet scholars struggle to

create a theoretical foundation that can integrate conflicting empirical findings. We incorporate

categorical dynamics to industry life cycle theory to enhance existing entry timing theories. We

introduce the concept of a dominant category—the conceptual schema that most stakeholders

adhere to when referring to products that address similar needs and compete for the same

market space— linking it to the dominant technological design and entry-timing advantages.

In particular, we propose the existence of a window of opportunity for firm entry that starts with

the emergence of the dominant category and ends with the emergence of the dominant design.

©2013 The Authors. Strategic Management Journal published by John Wiley & Sons Ltd.

INTRODUCTION

The timing of entry into a new market is an impor-

tant strategic choice for firms. Because of its impli-

cations, timing of entry and its effects on firm

performance and survival have been key research

questions in strategy (Mitchell, 1991), innova-

tion management (Foster, 1986), and organiza-

tional theory (Hannan and Freeman, 1989). These

streams of literature have provided broad con-

ceptual structures to frame entry-timing strategies,

while other scholars have focused on the resources,

mechanisms, and conditions that help early movers

secure a competitive advantage (Lieberman and

Montgomery, 1988).

Keywords: entry-timing advantages; categories; first–

mover advantage; industry life cycle; dominant design

*Correspondence to: Fernando F. Suarez, Boston Univer-

sity School of Management, 595 Commonwealth Avenue,

Room 649-A Boston, Massachusetts 02215, U.S.A. E-mail:

fsuarez@bu.edu

©2013 The Authors. Strategic Management Journal published by John Wiley & Sons Ltd.

This is an open access article under the terms of the Creative Commons Attribution-NonCommercial-NoDerivs

License, which permits use and distribution in any medium, provided the original work is properly cited, the use is

non-commercial and no modifications or adaptations are made.

Entry-timing literature has gradually shifted

from studying the effects of being the very first

mover to studying order of entry (Lambkin,

1988; Lieberman and Montgomery, 1988), the

link between firm capabilities and timing of

entry (Lee, 2009; Robinson et al., 1992), and the

challenges that first movers face, such as lack

of legitimacy (Aldrich and Fiol, 1994; Dobrev

and Gotsopoulos, 2010; Hannan and Freeman,

1989) and technological uncertainty (Anderson

and Tushman, 1990; Sorenson, 2000). Moreover,

some authors have linked timing advantages

specifically to the stage of an industry’s evolution

(Agarwal and Bayus, 2004; Christensen et al.,

1999; Markides and Geroski, 2005). Despite this

progress, consensus is still lacking regarding

the optimal time for entry, and a generalizable

theoretical framework capable of discriminating

between different cohorts of entrants has yet to be

established (Suarez and Lanzolla, 2007).