Chapter 5: Timing Of Entry

Question 0

What are the first mover advantages?

Answer 0

1. Brand loyalty and technological leadership
2. Preemption of scarce assets
3. Exploiting buyer switching costs
4. Reaping increasing returns advantage

Question 1

Entrants are often divided into what three categories?

Answer 1

First movers
Early followers
Late entrants

Question 2

First mover disadvantages

Answer 2

1. Higher research and development expenses
2. Undeveloped supply and distribution channels
3. Immature enabling technologies and complements (advanced PDA’s with crappy batteries)
4. Uncertainty of customer requirements

Question 3

Define incumbent inertia

Answer 3

The tendency for incumbents to be slow to respond to changes in the industry environment due to their large size, established routines, or prior strategic commitments to existing suppliers and customers

Question 4

Is it better to be a first mover, an early follower or a late entrant?

Answer 4

Early follower

Question 5

What are the nine factors that influence the optimal timing of entry?

Answer 5

1. How certain are customer preferences?
2. How much improvement does the innovation provide over previous solutions?
3. Does the innovation require enabling technologies, and are these technologies sufficiently mature?
4. Do complementary goods influence the value of the innovation, and are they sufficiently available?
5. How high is eye threat of competitive entry?
6. Is the industry likely to experience increasing returns to adoption?
7. Can the firm withstand early losses?
8. Does the firm have resources to accelerate market acceptance?
9. Is the firm’s reputation likely to reduce the uncertainty of customers, suppliers, and distributors?

Question 6

Explain the parallel development process

Answer 6

The parallel development process is when multiple stages of the new product development process occur simultaneously