Leapfrogging and partial recapitulation as latecomer strategies

Abstract

Latecomer firms entering established industries face a pivotal strategic conundrum: Should they prioritize learning from industry leaders or directly compete against them? This paper examines two primary strategies that latecomers can adopt in response to this challenge. Each strategy emphasizes either learning or competition. Partial recapitulation underscores knowledge acquisition by selectively replicating the developmental pathways that have led industry leaders to their current dominant positions. Conversely, leapfrogging fosters competition by harnessing the most advanced products and practices to challenge industry incumbents directly. The appropriateness of these strategies heavily depends on the latecomers' internal capabilities and their external innovation ecosystems. We propose that partial recapitulation is optimal for latecomers with nascent capabilities operating in closed ecosystems, whereas leapfrogging is ideal for latecomers with strong capabilities within open ecosystems. The strategic choice between these two approaches not only delineates firms’ competitive positioning but also defines their learning and innovation trajectory, with significant implications for their competitive performance and industry standing. Our framework enhances the understanding of key strategic choices in latecomer firms, providing valuable insights for decision-makers in this context.