The moderating effects of technological capabilities on the market pioneering - Firm survival relationship

A core idea in corporate entrepreneurship is that strategic renewal requires a syncretic balance between product and markets on one hand, and exploration and exploitation on the other. This paper investigates firm performance in industries where rapid changes are accompanied by the emergence of new technological sub-fields and market segments. We re-examine first mover advantage (FMA) by adopting a dynamic, evolutionary conceptualization of first movers, and in the context of the technological 'play' of the product being launched. In the empirical setting of the disk drive industry during 1977-1997, we show that a firm's technological capability has crucial implications on the outcome of its market pioneering efforts. We demonstrate that while pioneering elevates survival rates when a firm is a technology leader, such early to market strategies hurt when the technological performance of the product is below a certain minimum level. Until a firm accomplishes this minimum of technological play in the product, a firm is better off delaying entry even in product markets that have very short life-cycles.