Order of market entry and survival risk in really new versus incremental innovation product -markets
Pioneering a really new product is riskier than pioneering an incrementally new product. This is because there is greater uncertainty about the type and extent of customer needs that will be satisfied by a really new product. Further, there is also technological uncertainty whether the really new product—or the company marketing it—can deliver on its promise to meet customer needs once they have been articulated. The key question in this paper is: how does survival risk vary with order of market entry in really new versus incrementally new product markets? To this end, this study compares survival rates over time of 55 pioneers for really new products with those of 101 early followers in industrial goods businesses. The study also investigates how survival risk varies with order of market entry in incremental innovation markets. Specifically, the study compares the survival rates over time of 184 market pioneers in incremental innovation product-markets with those of 298 early followers. In our industrial goods sample, the study finds that, while the pioneers have significantly higher survival rates than early followers in incremental innovation markets, they do not have higher survival rates than early followers in really new product-markets.
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