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| Author: | Fan, T.P.C. |
| Title: | De novo venture strategy: arch incumbency at inaugural entry |
| Journal: | Strategic Management Journal
2010 : VOL. 31:1, p. 19-38 |
| Index terms: | strategic management planning new enterprise market entry competition airlines Europe |
| Language: | eng |
| Abstract: | By definition, new industry ventures do not share several market-contact points with incumbents. As such, these new ventures often encounter aggressive retaliation at the outset, which could be a threat for their survival. This study develops the notion of an 'arch incumbent', hypothesizing that generally a large market overlap with an incumbent lowers the survival odds of a new entrant. However, a large market overlap with the 'arch incumbent' combined with an aggressive inaugural market entry - or a different market positioning - lowers the probability of retaliation by the 'arch incumbent', hence increasing the probability of survival for a new entrant. The hypotheses are supported by empirical experience of new ventures in the intra-European passenger airline industry. |
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