Cumulative strategic capability and performance of early movers and followers in the cyber market

Abstract

Today, the cyber market is evolving rapidly in the networked age. In the cyber market, the traditional competitive strategy appears to no longer be effective. This study investigates the strategic choice differences of online firms based on their strategic capabilities and performance. More specifically, the study reviews the advantages and disadvantages of early movers and followers based on Porter's strategic topology, as well as strategic capabilities derived from Sand Cone model. The results show that early movers have more cumulative strategic capabilities than followers do in market differentiation, innovative differentiation, and cost leadership. However, early movers have better focus strategy than followers. These results have provided new insights for the scholars and entrepreneurs to reexamine traditional strategic approaches and the order of entrance effects in the cyber market.