How to beat early movers: The role of competitive strategy and industry dynamism on followers’ performance in the telecommunications industry

The idea of first-mover advantages is frequently used by both managers and academics alike. Despite its importance for understanding the performance of entry in new markets, the evidence remains mixed. Our study advances research on the entry timing-performance relationship by adopting a contingency perspective that includes both micro (competitive strategies) and macro (industry dynamics) dimensions to explain differences in entrants' profitability. In this paper we focus on follower firms and propose that cost leadership is the best strategy for them to successfully entering a market. In addition, recognizing the contingency effect of industry dynamism, we also examine how market growth and technology evolution affect the effectiveness of followers’ competitive strategies. Specifically, we propose that followers will be better off by using cost strategies in growing markets, while when operating in contexts of technological change the performance of the cost leadership strategy will be lower.