JIST

Journal of Information Science and Technology

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Vol 2 Iss 2 Article 1

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icon Fast-Follower Advantages And Network Externalities In (74.41 kB)

 

Title: Fast-Follower Advantages and Network Externalities in I.T.-Driven Markets

 

Author(s): Kristine R. Ankney & Gezinus J. Hidding

 

Abstract:

Recent research into the theory of first-mover advantage has revealed that a significant number of first-movers in I.T.-driven markets eventually lose market leadership. The belief in first-mover advantage spawned a pervasive body of work in business strategy and was further perpetuated by popular media. The assumption of first-mover advantage has been extended by research suffering from survivor bias, whereby pioneers were recognized only among surviving firms. Instead, recent research suggests that fast followership may offer an important strategic advantage. For example, in their study of 27 I.T.-driven product categories, Hidding and Williams (2003) found that a fast follower gained market leadership, on average, 60 percent of the time. Although many hypotheses for fast-follower advantage have been suggested, few have been empirically tested. There is a particular dearth of research into fast-followership based on positive network externalities, which is of particular relevance in I.T.-driven markets. To stimulate the pursuit of such research, this paper presents a conceptual framework and a set of propositions that recognize key factors pertaining to network externalities that contribute to fast-follower advantage in I.T.-driven markets.

Last Updated on Thursday, 30 June 2011 15:15