Market Entry and Survival for De Novo Industry Entrants: An Integrated Analysis

• Main Author: FAN, Terence Ping Ching
• Format: text
• Language: English
• Published: Institutional Knowledge at Singapore Management University 2006
• Subjects: new entrant survival; market entry; airline industry; Entrepreneurial and Small Business Operations
• Online Access: https://ink.library.smu.edu.sg/lkcsb_research/1825
• Institution: Singapore Management University

This paper attempts to bridge the prescriptive discrepancies between the traditions of industrial organizations and institutional theories on nascent, de novo industry entrants through an integrated analysis covering management experience, strategic orientation and market entry decisions. We rely on a census of new ventures in the intra-European scheduled airline industry. We find that those entrants focusing on new as opposed to existing, "legitimate" markets report significantly higher chances of survival than their peers. Given the industrial context, we expected a low-cost orientation to enhance survivability among new entrants but did not find evidence of this as a viable entry strategy. Finally, contrary to existing evidence, entrant survivability does not improve as with time. It is, however, aided significantly by prior management experience in the industry.