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Swift and Smart: The Moderating Effects of Technological Capabilities on the Market Pioneering–Firm Survival Relationship

Rotman School of Management, University of Toronto, Toronto, Ontario M5S 3E6, Canada
Fox School of Business and Management, Temple University, Philadelphia, Pennsylvania 19122
College of Business, University of Illinois at Urbana-Champaign, Champaign, Illinois 61820
College of Business, University of Illinois at Urbana-Champaign, Champaign, Illinois 61820
april.franco{at}rotman.utoronto.ca
mbsarkar{at}temple.edu
agarwalr{at}illinois.edu
rechamba{at}illinois.edu

We extend the concept of first-mover advantage to the context of high-technology industries with multiple product generations, and propose that the notion of first-mover advantage needs to be viewed not only through a dynamic lens, but also in conjunction with technological capability. Our main finding is that first-mover advantages are best understood in tandem with the firm's technological capabilities; early entry is beneficial only for pioneers that are technically strong. However, pioneers that are low on technological capabilities suffer from poor survival rates vis-à-vis market responders or nonentrants into new product generations.

Key Words: dynamic capabilities; first-mover advantage; strategy; industry evolution; entrepreneurship; technology strategy
History: Received: July 4, 2006; accepted: March 20, 2009.