Order of Entry and Business Performance: An Empirical Synthesis and Reexamination

Abstract

One stream of research for order of entry effects focuses on the possibility that the order of entry exerts a direct impact on business performance. A second stream of research, the contingency perspective, debates the merits of whether the order of entry, in combination with other market strategy and marketplace variables, is what actually drives business performance. The findings from studies focusing on possible direct effects offer only mixed evidence in favor of a pioneering advantage. The contingency perspective, however, has not been subjected to systematic, empirical scrutiny. Against this backdrop, the authors conduct a meta-analysis of the pioneering-market share findings and an examination of the contingency perspective of order of entry effects. The findings from the meta-analysis reveal that, on average, earlier entry is associated with greater market share. The findings from the contingency analysis, however, offer evidence suggesting that the contingency perspective is the more valid perspective for capturing the association between order of entry and market share. The authors discuss the theoretical and managerial implications of their findings and several directions for further research.