pioneered low cost airline
pioneered low cost airline in the early 80s, is still the leader in the United States (Lovelock, 1985). The same can be said for RealNetworks, the pioneer in audio and video streaming over the Internet (Sarasvathy and Kotha, 2004). Secondly, because it is certainly difficult to be a fast follower in general. Under some cir- cumstances, a firm might find itself in a position to fast follow a new entrant, as Microsoft did in 1995 for the Internet, a market the company initially ignored (Cusumano and Yoffie, 1998); but it usually is the case because the firm has been active in a related market for some time. Systematically organizing to be a fast follower in all possible markets is difficult and amounts to be rather passive in the face of market changes. A purely passive fast follower might not have the necessary knowledge to be able to address the opportunity successfully (Cohen and Levinthal, 1990).
The conclusion from this literature review is that the distinction between first and second mover does not explain variation in success of new market domination. There is a need to define a different categorization (Christensen, 2006). Other factors seem to play a role in the performance of a firm following its entry into a new market, other than order and timing of entry (Durand and Coeurderoy, 2001). One of the reasons is that success factors can be largely contextual. Suarez and Lanzolla (2007) identify two of these factors as being the pace of technological evolution and market evolution. They note that in most cases, firms are not able to influence these factors. Rather than simply in terms of order or speed of entry, the question must be discussed in terms of environmental change, particularly with regards to the technology, complementary infrastructure and demand character- istics (Schilling, 2002) as well as the different stages of the battle for dominance (Suarez, 2004). The strategy used for market entry also plays a crucial role (Durand and Coeurderoy, 2001), as well as other factors such as the right fit between resources that the firm possesses and that are needed for the target market (Kerin et al., 1992).
Market family trees
In order to go beyond the distinction between first and second movers, we need to gain a deeper understanding of the mechanisms behind market evolution. Inter- estingly, markets, with firms one of the two central institutions of capitalist societies, have a shadowy existence in the economic literature (Coase, 1988) and have essentially considered as given by the classical economic analysis. Take for example, Arrow’s (1974) admission, “Although we are not usually explicit about it, we really postulate that when a market could be created, it would be”. (Sarasvathy and Dew, 2005). Even strategic (e.g., Porter, 1980) and marketing management (e.g., Kotler and Keller, 2005) have taken their cues from the exogenous market
Blue Ocean or Fast-Second Innovation? A Four-Breakthrough Model 365
