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Journal of Business Research 61 (2008) 925 932

Market pioneers, late movers, and the resource-based view (RBV): A conceptual model
R. Zachary Finney a,, Jason E. Lueg b,1 , Noel D. Campbell c,2
University of South Alabama, Mitchell College of Business, Department of Marketing and E-Commerce, MCOB 356, Mobile AL 36688 0002, United States b Mississippi State University, College of Business and Industry, Department of Marketing, Quantitative Analysis, and Business Law, P.O. Box 9582, Mississippi State MS 39762, United States University of Central Arkansas, Department of Economics, Finance, and Risk Management, 201 Donaghey Avenue, Conway AR 72035, United States Received 9 January 2007; accepted 25 September 2007
a

Abstract Lieberman and Montgomery note that we see benefits from linking empirical findings on first-mover advantages with the complementary stream of research on the resource-based view of the firm (1998, p. 1111); they suggest that such a link will help explain differences in firm performance. Therefore, this study develops a conceptual framework linking FMAs with the resource-based view of the firm (RBV); in doing so, this framework explains the links between entry timing, resource management, and firm performance. Specifically, this study examines FMAs in light of a four-step resource management process [Morgan RM. Relationship marketing and marketing strategy: the evolution of relationship strategy within the organization. In: Sheth JN, Parvatiyar A, editors. Handbook of Relationship Marketing. Thousand Oaks, California: SAGE Publications, 2000. p. 481504.; Morgan RM, Hunt S. Relationship-based competitive advantage: the role of relationship marketing in marketing strategy. J Bus Res 1999; 46 (November): 28190.] consisting of: 1) efficient acquisition (EA), 2) bundling/combining (BC), 3) positioning (POS), and 4) maintenance/protection (MP). The link between FMAs and the resource management process helps explain why so few first movers retain their advantages. 2007 Elsevier Inc. All rights reserved.
Keywords: Resources; Capabilities; Resource-based view; First-mover advantage; First mover; Market pioneer; Late mover

1. First-mover advantages (FMAs), late-mover advantages (LMAs), and the resource-based view (RBV) of the firm: An overview FMA (first-mover advantage) is the ability of a firm to earn above average profits by a) entering a market first and b) entering the market in a way that thwarts other firms' attempts to compete in that market (Lieberman and Montgomery, 1988). At least three bases produce FMAs: 1) technology (product introduction
Corresponding author. Tel.: +251 460 6033; fax: +251 460 7909. E-mail addresses: zfinney@usouthal.edu (R.Z. Finney), jlueg@cobilan.msstate.edu (J.E. Lueg), Ncampbell@uca.edu (N.D. Campbell). 1 Tel.: +662 325 7011; fax: +662 325 7012. 2 Tel.: +501 852 7743; fax: +501 450 5302. 0148-2963/$ - see front matter 2007 Elsevier Inc. All rights reserved. doi:10.1016/j.jbusres.2007.09.023

learning curve effects and advantages based on R&D), 2) preemption of assets, and 3) switching costs (Lieberman and Montgomery, 1988). Market pioneers enjoy FMAs. However, market pioneering carries potential disadvantages as well (Lieberman and Montgomery, 1988): Late movers may free ride on some of the costs shouldered by the pioneer Large technological or market uncertainties may exist when entering a market first Technology or customer needs may shift after the pioneer enters the market First movers may suffer from incumbent inertia. That is, first movers may fail to change their business practices as the product market changes

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1.1. Resource-based view (RBV) of the firm The RBV explains how firm resources drive differences in firm performance. Critics of the RBV assert that broad conceptualizations of firm resources ignore important differences in firm assets and firm abilities (Priem and Butler, 2001). Therefore, scholars ditinguish between firm resources and firm capabilities (c.f., Amit and Schoemaker, 1993; Dutta et al., 2005; Greenley et al., 2005; Helfat and Peteraf, 2003; Mahoney, 1995; Makadok, 2001). A resource is a tangible or intangible asset. Resources can be valued and tradedsuch as a brand, a patent, a parcel of land, or a license (Hoopes et al., 2003, p. 890). Individual employee skills are also resources (Hoopes et al., 2003; Lieberman and Montgomery, 1998). Resources are converted into final products or services by using a wide range of other firm assets and bonding mechanisms [emphasis in original] (Amit and Schoemaker, 1993, p. 35). On the other hand, capabilities are a firm's capacity to deploy Resourcesusing organizational processes, to effect a desired end [emphasis in original] (Amit and Schoemaker, 1993, p. 35). A capability is intangible; firms cannot quantify (i.e., value) their capabilities. A capability is a firm's capacity to undertake a specific activity (Hoopes et al., 2003; Lieberman and Montgomery, 1998). Under this framework, resource management is a capability. Resource management is the set of strategic choices concerning the firm's tangible and intangible assets. So strategists can use resource management to generate SCA (Mahoney and Pandian, 1992; Penrose 1959). 1.2. Value, price, and cost: The VPC framework SCA does not directly flow from resources that are valuable, rare, inimitable, and non-substitutable (Priem and Butler, 2001; Barney, 1991). Instead, the relative difference in the amount of value generated by firms is elemental to competitive advantage [emphasis in original] (Priem and Butler, 2001, p. 29). Firm generated value is the fundamental concept determining the extent of competitive advantage [emphasis in original] (Priem and Butler, 2001, p. 29). Hoopes et al. (2003) explain value's role in the RBV through a bargaining model that consists of value, price, and cost (see also Tirole, 1988). This model illustrates both the buyer's and the seller's perspectives. Here, buyer and seller bargain over a product's price (P); the product provides value (V) to the buyer and costs the seller some sum (C) to produce. Value is the price a buyer is willing to pay [emphasis in original] (Hoopes et al., 2003, p. 891). Therefore, for the customer, value provided must exceed the product's price (V P). The seller wants to maximize the difference in the product's price and cost (P C). The supplier's resources and capabilities, in turn, influence the value of the good to the buyer and/or the cost of producing it [T]he firm that produces the largest difference between value and cost has an advantage over rivals (Hoopes et al., 2003, p. 891892). Value arises from the firm's resources and how those resources are managed [emphasis in original] (Morgan, 2000, p. 496). One may surmise, therefore, that resource management is the key lever the strategist uses to create SCA.

1.3. Resource management While many conceptualizations of the resource management process exist, this paper uses Morgan's (2000) conceptualization because Finney et al. (2005) established empirical support for Morgan's work. Morgan (2000) conceives of resource management as a four-step process: 1) efficient acquisition (EA), 2) bundling/combining (BC), 3) positioning (POS), and 4) maintenance/protection (MP). 1.3.1. Efficient acquisition (EA) Firms must possess resources before they can create value with those resources. However, the firm must pay less for resources than they are worth. EA ensures that the price (P) the firm charges customers exceeds the firm's resource costs (C). Lower resource acquisition costs allow firms to sell products profitably at prices low enough to entice people to buy. If a firm fails to hold down the acquisition costs (C), competitors that minimize acquisition costs can offer the same value at a lower price. 1.3.2. Bundling/combining (BC) Following acquisition, the firm creates customer value by fusing single resources into complex products. These offerings must provide customer value that exceeds the cost paid by the firm (V N C). If a firm's strategist succeeds at BC, the firm attains a complex set of higher order resources that are difficult for rivals to imitate (Morgan, 2000; Morgan and Hunt, 1999). 1.3.3. Positioning (POS) POS shapes the consumer's view of a product (Ries and Trout, 1986). Even if a firm attains resources at good prices and combines them into a desirable product, the product still may not sell. The firm must also create an image (or position) for the product that makes consumers want to buy. POS serves to widen the difference between value and price (V P). Customers will prefer a firm's offerings as the gap between the value and price of the offerings widens relative to the gap between the value and price of competing offerings. 1.3.4. Maintenance/protection (MP) The unique sequence of EA BC POS that produces superior results at one point in time may not provide customer value at another time. Firms, therefore, must continually adjust their resource management strategies (i.e., must maintain their resources). Similarly, managers must protect resources; managers cannot allow competitors to duplicate their resources. Firms use MP to realign their resource management decisions regarding EA, BC, and POS. This paper differentiates between MP activities relating to efficient acquisition (MPEA), bundling/ combining (MPBC), and positioning resources (MPPOS). Therefore, the firm uses MP to preserve the gaps between price and cost (P C), value and cost (V C), and value and price (V P). 2. Crafting first-mover advantage (FMA) If a firm a) minimizes resource procurement costs (C) and b) extracts value (V) from those resources in excess of the resources'

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cost (C), the firm efficiently acquired resources (Morgan, 2000). Suppose a first mover's resource costs are higher than the resource costs of rival firms. If the first mover offers more customer value than the rivals offer from a given set of resources, an FMA is still possible. However, high pioneer resource costs provide a chance for imitators to compete using a low cost strategy. In the airline industry established legacy carriers (such as Delta, United, and American) have higher costs than newer, discount carriers (such as Southwest and JetBlue) (Anonymous, 2005). These older airlines inefficiently acquire their resources. As a result, many legacy carriers have declared bankruptcy and cut costs (Manor and Chandler, 2003). Hence, the following propositions: P1A. The level of firm resource costs is negatively correlated with the firm's chances of becoming a product pioneer. P1B. The level of firm resource costs is negatively correlated with the firm's chances of becoming a market pioneer. P1C. The level of firm resource costs is negatively correlated with the firm's chances of attaining a first-mover advantage (FMA). BC allows the firm to become a product pioneer. To become a product pioneer, a firm goes beyond resource acquisition and uses BC to create higher-order resources (Morgan, 2000; Morgan and Hunt, 1999). BC helps link resource acquisition and the products that the firm eventually sells. If a strategist ignores bundling/combining he or she will likely be stuck with a set of incompatible resources (Wernerfelt, 1984). Though not the product pioneers, Matsushita, JVC, and Sony were the first companies to market VCRs successfully to the mass market (Tellis and Golder, 1996). Superior BC was central to their success. At JVC, Yuma Shiraishi, manager of video recorder development, provided just a few guidelines to his engineers: develop a machine that could sell for $500, while using little tape and retaining high quality picture (Tellis and Golder, 1996, p. 68). Taken together, this bundle of resources propelled these three firms to a dominant position in the VCR market. In summary: P2. Firms that combine high skill in a) acquiring resources efficiently and b) bundling/combining individual resources into higher-order resources are more likely to become product pioneers than are firms that lack these two skills. A firm that acquires a valuable set of resources and uniquely bundles/combines them may well become a product pioneer. Still, no financial benefit accrues until the firm offers that bundle of resources for sale; (i.e., the firm must also become a market pioneer). To sell new products successfully, market pioneers must ensure that they create the proper image or positioning (POS) for the new product. However, good BC, ironically, may complicate POS. New products may be extremely difficult to position (Suarez and Lanzolla, 2005). The potential breakdown between BC and POS helps explain why so many product pioneers either a) fail to become market pioneers or b) become market pioneers but fail to retain their market leadership.

Kodak's early success illustrates the benefits of linking superior BC to superior POS: [George Eastman]designed a system whereby consumers took pictures with a returnable camera, mailed in the camera with the exposed film for developing, and received the developed pictures and a reloaded camera. The company's slogan, You press the button, we do the rest, convinced consumers that photography was finally available to amateurs (Tellis and Golder, 1996, p. 68). Therefore: P3A. Firms that combine high skill in a) acquiring resources efficiently, b) bundling/combining individual resources, and c) appropriately positioning resources are more likely to become market pioneers than are firms that lack these three skills. In the short run, market pioneering should increase the firm's sales, at least while the new product enjoys a monopoly (P3A). However, this is by no means analogous to a first-mover advantage. Successful market pioneering is certain to attract rivals; as noted, few market pioneers retain market leadership. So the short-term value created by the market pioneer for any given segment is a function of the pioneer's skill at providing value to that segment through a) efficient resource acquisition, b) bundling/combining resources, and c) positioning resources or: STCVSEG f FMVEA ; FMVBC ; FMVPOS STCVSEG short-term customer value for a given segment FMVEA value created by the first mover through efficient resource acquisition FMVBC value created by the first mover through bundling/ combining FMVPOS value created by the first mover through positioning Suppose the pioneer enjoys a monopoly in a new product market. Here one need only consider the value created by the pioneer. The amount of value the pioneer creates for a given segment through these three steps determines whether that segment buys the pioneer's offering. If rivals subsequently enter the market, one also must consider consumer reaction to the competing products. In summary: P3B. Firms that combine high skill in a) acquiring resources efficiently, b) bundling/combining individual resources, and c) appropriately positioning resources will have higher short-run sales of new products than will firms that lack these three skills. As time passes, the firm's initial resource base will age; also, successful market pioneering will almost certainly spur market entry by rivals. The first three steps of the resource management process (EA BC POS) cannot provide longterm customer value (LTCV). Over time, the first mover must also maintain and protect (MP) the initial resource position. But how may a first mover improve firm resources after market entry? Under this framework, the first mover must

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rethink the three initial resource management decisions while keeping firm resources from competitors. (The labels for these three updating tasks are: FMVMPEA, FMVMPBC, FMVMPPOS; these tasks describe the value first movers add by updating the initial decisions regarding resource acquisition, bundling/ combining, and positioning respectively). A look at recent innovations shows that market leadership is difficult to retain. Consider the gaming console and laptop computers: In the gaming console marketat least six generations of technology emerged in rapid, succession, each pushing forward a new winner. The same thing happened in hard drives, and laptop computers.laptop technology evolved so quickly that each successor, after, briefly achieving dominance, was soon supplanted itself (Suarez and Lanzolla, 2005, p. 126). So, long-term customer value for a given target market is a function of the value provided to that segment by the market pioneer's initial a) resource acquisition, b) bundling/combining, and c) positioning and d) the market pioneer's subsequent efforts to maintain/protect each of those sets of resources the pioneer built in a, b, and c. Or: LTCVSEG f FMVEA ; FMVMPEA ; FMVBC ; FMVMPBC ; FMVPOS ; FMVMPPOS LTCVSEG long-term customer value for a given segment FMVEA value created by the first mover through efficient resource acquisition FMVMPEA value created by the first mover through maintaining/protecting resource stocks FMVBC value created by the first mover through bundling/ combining FMVMPBC value created by the first mover through maintaining/protecting bundles/combinations of resources FMVPOS value created by the first mover through positioning FMVMPPOS value created by the first mover through maintaining/protecting positioning of firm resources The importance of maintaining/protecting resources is twofold. First, under the RBV, resources are the foundation of firm success. Second, firms may build resource stocks only over long periods of time (Dierickx and Cool, 1989; Pettus, 2001). A firm that fails to maintain resources, therefore, faces a long journey in trying to catch rival firms. Research supports the importance of maintaining and protecting resources. Success does not flow from a static set of resources (McGee and Thomas, 1994). Similarly, scholars assert that order of entry effects tend to dissipate over time (Brown and Lattin, 1994; Huff and Robinson, 1994). Therefore: P4. Firms that combine high skill in a) acquiring resources efficiently, b) bundling/combining individual resources, c) appropriately positioning resources, and d) maintaining and

protecting those resources are more likely to attain first-mover advantages than are firms that lack these characteristics. Fig. 1 illustrates the links between the FMA and RBV concepts; more specifically, the Figure shows the benefits the first mover stands to gain by successfully managing each of the four resource management tasks. In doing so, Fig. 1 describes how a firm attains FMA. Fig. 1 encapsulates the argument contained in the preceding paragraphs. Resource management is a firm capability and is the lever the firm uses to create FMA. Resource management is a four-step process: 1) efficient acquisition (EA), 2) bundling/ combining (BC), 3) positioning (POS), and 4) maintenance/ protection (MP). Firms must first efficiently acquire resources and then bundle/combine these resources into higher order offerings; this allows the firm to create an innovative product (i.e., become a product pioneer). To create FMA the firm must also become the first firm to sell that product (i.e., become a market pioneer). Positioning involves attracting customers; positioning, therefore, allows the firm to succeed as a market pioneer. Critically, the firm must complete the resource management process. In addition to EA, BC, and POS, the firm seeking FMA must also maintain and protect (MP) resources. As time elapses, firms use MP to realign their resource management decisions regarding EA, BC, and POS. Firms that combine high skill in a) acquiring resources efficiently, b) bundling/combining individual resources, c) appropriately positioning resources, and d) maintaining and protecting those resources are more likely to attain and then retain FMAs than are firms that lack these characteristics. 3. Late-mover responses Pioneers can attain FMA; yet, in a given market, most firms will be followers. Research also reveals that late-market entry is often profitable (c.f., Srinivasan et al., 2004). Resource management can permit late movers to compete away FMAs. P5AP5E evaluates a market in which the first mover is faced with a rival. For the first time, the customers have the option to buy from a firm other than the first mover. So, P5A P5E examines what the first mover must do to retain market leadership after competitors enter the market. The first mover's ability to create value for a given segment is still a function of the firm's: a) initial resource management decisions and b) subsequent attempts to maintain/protect those resources. But here the late mover also creates value for the first mover's target market; specifically, the late mover's skill at the first three resource management tasks also offers some level of value to the first mover's customers. (The late mover need not maintain/protect resources to take leadership away from the pioneer but need only devise a product that provides more value relative to price or cost. The late mover that elects to stay in the market for a long time will need to maintain/protect resources.) How does a firm attain superiority when faced with competition? The first mover's resource management skill

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Fig. 1. First-mover advantage and resource management.

determines the first mover's competitive position, relative to how well rivals manage their resources. Suppose the first mover provides more value to a given segment. Here the first mover can expect to best rivals. What if the late mover provides more value to a particular segment? The first mover's leadership will be at an end. A situation in which the pioneer and the late mover provide equal value to a customer segment is possible; but equality will be temporary. In open markets, as firms continually alter their resource bases, customer value provided also changes. Consider General Motors. GM's managers claim that they have many plans aimed at restoring GM's profitability. Seen from this paper's perspective, these initiatives fall under the headings of maintaining and protecting GM's resource acquisition (MPEA), bundling/combining (MPBC), and positioning (MPPOS) capabilities. General Motors has taken a number of steps to cut resource acquisition costs (i.e., more efficiently acquire resources). GM's management has pressed a major supplier, Delphi, to cut prices (McCracken, 2006). Similarly, GM has tried to bundle/combine resources differently to produce better cars. GM recently announced plans to spend over half a billion dollars to improve engines, transmissions, metal stamping, and body shops (Chon, 2006). Finally, GM has been using auto shows as venues to reposition GM as a company that can sell more than trucks and sport-utility vehicles (Lundegaard, 2006). So: P5A. A first mover will outperform a given late mover in serving a given segment as long as: the total customer relative

value provided to the segment by the pioneers' initial resource management process (EA BC POS) and the subsequent value created by maintaining/protecting the resource position is greater than the total customer relative value provided to the segment by the late mover through resource management (EA BC POS). VSEGfm f FMVEA ; FMVMPEA ; FMVBC ; FMVMPBC ; FMVPOS ; FMVMPPOS N VSEGlm f LMVEA ; LMVBC ; LMVPOS VSEGfm customer value first mover provides for a given segment FMVEA value created by the first mover through efficient resource acquisition FMVMPEA value created by the first mover through maintaining/protecting resource stocks FMVBC value created by the first mover through bundling/ combining FMVMPBC value created by the first mover through maintaining/protecting bundles/combinations of resources FMVPOS value created by the first mover through positioning FMVMPPOS value created by the first mover through maintaining/protecting positioning of firm resources VSEGlm customer value late mover provides for a given segment LMVEA value created by the late mover through efficient resource acquisition

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LMVBC value created by the late mover through bundling/ combining LMVPOS value created by the late mover through positioning Under this framework, then, no absolute advantage to market pioneering exists. Hence, A firm should focus its resources on the scenario under which it has the strongest position relative to its competitors (Wernerfelt and Karnani, 1987, p. 191). Likewise: Some firms excel at leading whereas others excel at following, unless the effects of managerial skills are taken into account in estimating the impact of pioneering on performance, one might mistakenly conclude that, for all firms, the act of pioneering itself will lead to an unambiguous advantage (Kerin et al., 1992, p. 48; Moore et al., 1991). Kerin et al. (1992) propose that market changes tend to weaken FMAs. This framework helps explain why they are correct. Assume a late mover enters a market with a radically-innovative product. The new product may destroy the value created by the first mover's resource base. Hence, the length of first-mover advantages will be inversely proportional to the rate of technological change in an industry (Suarez and Lanzolla, 2005). Scholars suggest that severe market disruptions after market pioneering do not solely stem from late movers entering the market. Consumer changes also play a role. Shoppers who wait to buy improved versions of a formerly-new product may have entirely different preferences than the early adopters who purchased from the pioneer. After pioneering, both market and product changes are likely; both changes challenge first movers that attempt to retain their initial advantages. Hence: P5B. The amount of product change subsequent to market pioneering will be positively related to the probability of a late mover becoming the leader in that market. P5C. The amount of market change subsequent to market pioneering will be positively related to the probability of a late mover becoming the leader in that market. How may the first mover compete after a rival successfully enters with a radical innovation? The only feasible means would be a massive investment in a new set of resources. (More specifically, the first mover would emphasize: FMVMPEA, FMVMPBC, FMVPOS). Even for those first movers possessing the funds needed to realign their resources, such a change will be painful. Indeed, incumbent inertia is the rule when late movers enter (Lieberman and Montgomery, 1998). Consider a late mover that wants to compete away the first mover's initial advantages. This framework reveals that the degree of change introduced by any single innovation is not the only factor determining how strongly the latecomer challenges the first mover. The quantity of innovations by the latecomer is also important. A late entrant that attacks by successfully innovating on more than one resource management task creates a situation in which the first mover must make more changes (i.e., invest more money and time) in an effort to retain the FMA. Again, Kodak in the 1800s was a firm that innovated on multiple resource-management tasks (Tellis and Golder, 1996);

Kodak's multi-faceted innovation made catching up much more difficult for competitors. Consequently: P5D. Late movers that add value through more than one resource management task will be more successful than those that add value through a single resource management task. P5B, P5C, and P5D pertain to what Schumpeter (1942) refers to as creative destruction. What if a latecomer innovates on multiple resource management activities? Such a firm has the potential to follow in the footsteps of those firms that have revolutionized the economic structure by destroying the old and creating a new one (Schumpeter, 1942, p. 83). Scholars state that Firms develop resources over time in a complex, path dependent process (Pettus, 2001, p. 889; see also Dierickx and Cool, 1989). Hence, in the short run, firms find it difficult to compete away rivals' advantages when those advantages are based on complex, difficult-to-imitate resources. The longer a late mover waits to enter a given market, therefore, the longer the first mover can progress down the resource development path. Research supports this assertion; Robinson and Min (2002) and Coeurderoy and Durand (2004) discovered that the temporary monopoly enjoyed by a first mover contributes to the first mover's longevity in the marketplace. At least two important qualifications exist in regard to the preceding paragraph. First, what if a first mover enters a market and then stands pat with the original set of resources? This firm will waste the chance to make the resources more difficult for late movers to imitate. Second, think about a late mover that enters a market on the basis of a radical innovation; the late mover may not need to spend time copying an incumbent's outdated resource base. In regard to the first qualification, in most cases even a relatively stable resource base will change with time; under these circumstances, time elapsed between market pioneering and late-mover entry is still a positive for the incumbent. Similarly, for the second qualification, radical innovations can certainly destroy incumbents. True radical innovations, however, should be relatively rare; copying the first mover's resource base (or parts of this base) should be attractive to most late movers. So: P5E. Time elapsed between market pioneering and competitors' attempts to enter a particular market will be positively linked to the duration of the market pioneer's SCA. 4. Conclusion During the debates surrounding FMA, critics have pointed out that market pioneering is not synonymous with first mover advantage. This paper examines the tenuous links between market-entry timing and SCA. Market-entry timing is not a panacea, but is instead one part of firm strategy. Therefore, this paper considers both the impact of a) creating FMAs and b) managing FMAs subsequent to market pioneering. Previous frameworks tend to focus on the former issue while ignoring the latter.

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While the paper makes no specific predictions as to how many first movers will retain the lead in their markets, the paper contrbutes to a growing body of work that helps explain why so few first movers succeed in the long run. Pioneers often invest so heavily in the resources needed to bring an innovation to market that they cannot bear to adopt a new set of resources as the market shifts. But, the wise pioneer will bite the bullet and reinvent the firm's resource base (Chandy and Tellis, 1998). Indeed, research shows that incumbents have chances to innovate after market entry (Chandy and Tellis, 2000). 4.1. Managerial implications A firm interested in attaining and maintaining a competitive advantage by pursuing a position as a market or product pioneer needs to focus on effective resource management via EA (P1A, P1B, and P1C), BC (P2), POS (P3A, P3B), and MP (P4). In addition, prospective first movers should ensure that the four resource management steps are consistent with the firm's strategy (e.g., differentiation, low-cost). Also, the firm's resource management process must evolve while remaining congruent with the firm's strategy (whether or not the strategy remains constant or evolves over time). Strategists must tailor the firm's resource management capabilities to attain and maintain an FMA. For instance, in a stable environment, MP becomes a key step to protect organizational resources. In a more dynamic environment, EA becomes a key a firm should focus on attaining necessary resources at the lowest possible costs. In any environment, BC allows the firm to produce a desirable offering for the target market; similarly, in any environment POS explains to the target market why the firm's offerings are relevant and desirable. Superior resource management allows a firm to translate shortterm advantages (P3B) into FMAs (P4, P5A). 4.2. Measurability The most valuable extension of this paper would be to test the propositions. Such a study would require measures of the two major concepts under study here: resource management and FMA. Much discussion revolves around appropriate measurement when using the RBV; fortunately, Finney et al. (2005) measures each of the four steps in resource management. These authors measured the amount of time strategists spent on each of Morgan's four resource management tasks. (Specifically, they asked respondents what percentage of their time managing resources was devoted to each of the four resource management tasks; all answers summed to 100%.) These authors then linked time spent on resource management to firm strategy. (Specifically, they tested whether a firm's overall strategy (low cost or differentiation) predicts the firm's emphasis on each of the four resource management tasks. Because of the constant sum used to measure the dependent variable, the authors tested their hypotheses using seemingly-unrelated regression.) A similar set of measures would work for the framework outlined above; but authors might want to consider whether resource man-

agement skill would be a better measure than time spent on the resource management tasks. Measurement of market-entry timing has proven difficult for scholars. Golder and Tellis advocate using the historical method to study FMA (1992). In the historical method, scholars search archival material to collect longitudinal data about past events (Golder, 2000). Given that Golder and Tellis published several strong studies using the historical method, other scholars should also consider adopting the historical method to study FMAs. 4.3. Extensions The possible extensions of this study are vast; the following suggestions by no means constitute a comprehensive list. Readers should note that the framework in this paper assumes that the late mover and the first mover compete only to serve a single market segment. Obviously, many companies serve more than one type of customer; if a late mover can distinguish more than one segment in the first mover's customer base, then the framework would change considerably. The late mover could focus on serving only one sub-segment of the first mover's market, rather than attempting to compete for precisely the same segment as the first mover. By narrowing the focus, the late mover could create a situation where the first mover would have difficulty defending the entire target market. One extension would be to further consider this type of lateentry strategy. Similarly, the framework compares the first mover to a single late mover. But what if many firms enter the market? If more than one late mover enters, the first mover has a much more difficult task ahead. Different segments will value the same set of resources differently, and the first mover may see the original mass market carved into numerous small markets by multiple late movers. To compete in each sub-segment, the first mover would have to devise a different resource management plan for each sub-segment. An extension should address this scenario. Another extension would be to further explore the association between Morgan's (2000) four resource management tasks and customer value. While customer value is a function of these tasks, the precise manner in which these resource management tasks coalesce (additively, multiplicatively, etc.) to produce customer value is left as an empirical question. Such a study would likely require longitudinal data measuring entry timing, resource management, and performance from multiple firms. The above paragraphs, therefore, constitute what Wernerfelt (in a somewhat different context) called a first cut at a huge can of worms (1984, p. 180). Nevertheless, Lieberman and Montgomery (1998) called for an integration of the RBV and the FMA literatures; this study answers their call. References
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