Managerial assessment of potential entrants: Processes and pitfalls

Abstract

While others have studied the awareness and action phases of incumbent response, there has been little research on the threat assessment phase. In this paper, we focus on the incumbent's threat assessment decision process, i.e. how task characteristics can influence the evaluation of potential entrants. In an experiment using experienced marketing managers as subjects, we examine the influence of firm dependence, decision accountability and task complexity on their information acquisition behavior while assessing potential entrants. Our results provide important insights into how companies can and cannot improve managerial assessment of potential entrants.