Entry order and the effects it has on the performance of a firm have emerged as popular topics of interest for academics and practitioners alike. Since the publication of Lieberman and Montgomery's (1988) seminal article on first mover advantage in 1988, research on the subject has thrived (Lieberman and Montgomery, 2013; Suarez and Lanzolla, 2007). More recently, the focus of the stream has broadened to consider entry order advantages in a more comprehensive manner.

Studies in this stream have investigated different types of new markets in their analyses of entry advantages: new-to-the-world products, new generations of a product, or introducing existing products into new geographic locations (Lieberman and Montgomery, 2013). We derive our definition of entry order from Zachary et al. (2015), stating that it refers to the order of entry into a new or existing space (e.g. market, industry, or geographic region), relative to competitors, technology development, product life cycle, or other contextual referents. Despite extensive research, many of the central arguments on the entry order-performance relationship are still debated, justifying the need for further study on the topic (Klingebiel and Joseph, 2016).

The literature on entry order advantages has developed around three streams (Suarez and Lanzolla, 2007). The first stream focuses on identifying isolating mechanisms, that favor early movers by allowing them to protect themselves from imitation by their competitors (Rumelt, 1987; Lieberman and Montgomery, 1988). The most widely used classification of these favorable mechanisms includes three categories: technology leadership, preemption of scarce assets and switching costs (Lieberman and Montgomery, 1988).

The second stream is based on the premise that the resources and capabilities a firm possesses have an impact on its ability to reap the benefits of entering early (Fosfuri et al., 2013). Academics have argued that a diverse set of complementary assets is required in order for the firm to take full advantage of early entry, and that industry incumbents are often better positioned in terms of the resources they possess and readily have at their disposal (Teece, 1986; Mitchell, 1991; Agarwal et al., 2002). Even though the incumbent might have previously applied these resources in a different industry, they may be general-enough by their nature to be transferrable to new industries, thus lowering the firm's exit hazard from this new industry (Klepper and Simons, 2000; Klepper, 2002).

The third stream concentrates on the role of environmental-level conditions in enabling or disabling early entry advantages. Porter (1985) was one of the first to argue that entry order advantages depend on industry characteristics, particularly on the levels of technological change embedded within products and processes. Later on, a number of different environmental conditions have been considered by academics in this and other related streams, including (1) the pace of technology evolution and the pace of market evolution (Suarez and Lanzolla, 2007); (2) variability and uncertainty (Lambkin, 1988); (3) the degree of competition (Gal-Or, 1985); and (4) the existence of network effects (Farrell and Klemperer, 2007).

Despite decades of research and dozens of published articles, why is it that there still exists little generalizable knowledge on the entry order performance relationship? Lieberman and Montgomery's (2013) review of this conundrum finds numerous underlying problems, such as the definition of advantage in the literature, the utilized performance measure, the measurement of the duration of advantage, core construct definitions (e.g. new market, first movers and later movers), and biases in sample selection. Additionally, most studies in entry order focus on the emergence of a new product market, which is not a frequent occurrence. This makes it difficult to draw reliable comparisons, as contextual factors set many new markets apart from each other (Klingebiel and Joseph, 2016).

Furthermore, Lieberman and Montgomery (2013) address definitional problems such as how to define a market, a first mover (or first movers), and followers. For example, most studies do not distinguish between different types of new markets and innovations, although defining market boundaries is essential for the comparison of market share levels between different studies (Kalyanaram et al., 1995). As mentioned earlier, a new market can be made up of new-to-the-world products, or new generations of a product and can be created when existing products are introduced to new geographic locations. All of these considerations affect the measurement of entry timing advantage. Furthermore, the correct identification of the starting point of a new market is often very difficult and may lead to differing results in defining firms as first movers or followers (Lieberman and Montgomery, 2013).

As mentioned earlier, a majority of the commonly used firm performance measures are inadequate. Furthermore, many studies on entry order advantages consider only entry into completely new markets, which are naturally limited number, with market-specific contingencies further hindering their comparison. The definition of entry order adopted in this study allows for an examination from a broader perspective, namely that of entry into new competitive domains defined by technology levels inside the same market. This interpretation brings forth the idea of order of entry into a previously existing space, relative to competitors, technology development and product life cycle. In this paper, we utilize online customer evaluations of the product as a proxy for product performance, which is used as a measure of firm performance.

Based on previous research, there are a number of benefits associated with being the first to enter a market or a niche (VanderWerf and Mahon, 1997). The first-mover is often able to build isolating mechanisms through technology leadership, gaining control of scarce assets, acquiring expertise and creating switching costs for the customers (Lieberman and Montgomery, 1988; Finney et al., 2008). The exploitation of these mechanisms by the first-mover is likely to hinder the possibilities of its rivals to compete in the market, resulting in better performance for the first-mover.

However, there are also potential disadvantages to being the first to enter. In the early stages of a new market, there are uncertainties related to the utilized technologies and the market itself, as well as customer requirements, which may still be fluid and shift after the pioneer has entered (Lieberman and Montgomery, 1988). New products can be very expensive and risky to develop, and later entrants might be able to enter with superior technology, positioning, or brand name (Golder and Tellis, 1993; Lieberman and Montgomery, 1988).

In addition to first-movers, researchers have also investigated a more detailed picture on the order of entry and its effects on firm performance. Studies have focused not only on the first-mover, but early entrants in general (e.g. Makadok, 1998), fast followers (Lilien and Yoon, 1990) and laggards (Shamsie et al., 2004; Lvesque et al., 2013). Previous studies have found earlier entry to be advantageous in terms of a brand's market share (Urban et al., 1986; Makadok, 1998; Magnusson et al., 2009; Lilien and Yoon, 1990). Fast followers might benefit from the additional time to further develop an otherwise underdeveloped product to exceed the quality of the pioneering product (Lilien and Yoon, 1990). They can attempt to catch up to the pioneers by securing access to technology through, e.g. licensing, purchase of capital equipment, securing supply contracts, or entering into strategic alliances (Mathews et al., 2011). Additionally, the fast follower might be able to benefit from free-rider effects, i.e. the ability to imitate the innovation made by the pioneer and thus save in R&D costs (Gilbert and Birnbaum-More, 1996). Fast followers also have the potential to take advantage of the hurdles facing pioneers: possible market, technology and/or regulatory uncertainties might be resolved, and changes in the requirements for the new technology and the needs of the customers might arise after the pioneer's launch of a new product, and the followers have the possibility to time their response accordingly (Gilbert and Birnbaum-More, 1996). Due to these factors, early followers have been found to enjoy advantages over first-movers (Golder and Tellis, 1993).

Being the fast follower is not so easy, however. Decision-making timeframes, product development cycles and lengthy sales processes may delay a firm's entry into a quickly-moving market so much that they may find themselves entering the market too late (Wunker, 2012). However, even late movers can sometimes thrive. For example in the mobile telephone market, Motorola was the first to develop a cell phone, Nokia and Ericsson were fast followers and eventually early market leaders, but today, Samsung, LG and Apple are global leaders in the industry, despite entering the category much later (Wunker, 2012). This might be due to differing complementary assets possessed by later entrants, and changing industry conditions (Lvesque et al., 2013). Especially in the case of the mobile telephone market, the industry has experienced a significant disruption through the development of smart phones, which opened the doors to new entrants. In all, current research on entry timing seems to point towards the importance of considering the timing of entry and related factors as a whole, and not merely attempting to be the first-mover (Lvesque et al., 2013; Bohlmann et al., 2002; Klepper and Simons, 2000; Mitchell, 1991).

Previous research has found mixed results in terms of the effect of age on firm performance, and its effects on entry order and firm performance (Durand and Coeurderoy, 2001). Based on the idea that an older firm is able to acquire greater experience than younger firms, researchers have argued that post-entry performance is positively related to age after having survived a sufficient period of time (Audretsch, 1995). Many studies utilize both the firm age and firm tenure variables, as firm tenure captures more accurately the experience the firm has in the market in question, as learning effects offer firms with longer tenure a potential over later entrants (Scherer and Ross, 1990).

However, researchers of the opposing view state that, on average, younger firms outperform older ones due to problems arising from oldness that offset the benefits gained from experience (Dunne and Hughes, 1994). Thus, even though older firms are more likely to survive, they suffer from, for example, conservatism and blindness, which weaken their performance compared to younger firms (Dunne and Hughes, 1994; Evans, 1963; Durand and Coeurderoy, 2001).

In previous studies on the topic, researchers have quite consistently found a positive relationship between firm size and survival rates (Agarwal and Audretsch, 2001). This idea stems in part from the argument that larger organizations have better access to capital and trained workers (Aldrich and Auster, 1986), and legitimacy with external stakeholders (Baum and Oliver, 1991). Larger firms possess a greater resource base in general, enabling larger investments in R&D (enabling the development of better, higher quality products), and the ability to obtain and maintain various resources required (Agarwal et al., 2002). In the specific context of order of entry, size is of particular importance especially due to the larger resource base: larger firms might have the possibility to wait longer for the resolution of market and technology uncertainties, and still be able to catch up with pioneers and earlier innovators (Wernerfelt and Karnani, 1987).

The intensity of competition in an industry plays an important role in shaping the competitive environment of firms. It affects resource availability (Barnett, 1997), profitability (Bettis and Weeks, 1987), pricing (Gimeno and Woo, 1999), market positioning (D'Aveni, 1994) and the firm's strategies as well as its survival (D'Aveni, 1994; Gimeno and Woo, 1996; Barnett, 1997). As competition intensifies, product variety increases and firms require more resources to compete effectively. Furthermore, industry size is linked with entry order, as previous researchers have concluded that the phase of the industry life cycle might be affected by the actions of early entrants and that successful early entrants might be able to better spot the start of the growth phase in the industry (Golder and Tellis, 1993).

1. Analyse the case and write a summary highlighting all strategic management issues. (10 marks)
2. The intensity of competition in an industry plays an important role in shaping the competitive environment of firms. Elaborate this statement. (5 marks)
3. Explain when the first mover may be disadvantaged giving relevant examples.(10 marks)