Modes and orders of market entry: revisiting innovation and imitation strategies

Abstract

This paper focuses on the initial questions of how and when to enter a market from the perspective of a firm. By entry mode is meant a firm's strategy (innovation or imitation) for entering the market in response to environmental changes. Entry order refers to the related issue of market timing (first-mover or follower). Invention is understood as the conversion of human creativity, time and financial resources into new ideas. Innovation in turn reflects the practical and financial return on such investments. While there is little disagreement about what an innovator strategy is, imitative strategies are more ambiguous. Based on a corporate technology and innovation strategy perspective, the paper reconceptualises and extends existing modes and orders of market entry, and in particular clarifies the ambiguity associated with imitative strategies. Four distinct imitator strategies are identified. The paper closes with a brief discussion of limitations, avenues for future research, and implications for managers and affected policymakers.