Are there any first-mover advantages for pioneering firms?Lead market orientated business strategies for environmental innovation
August 28, 2012 Editor 0
Purpose – In environmental policy first-mover advantages for environmental technologies are often taken for granted. It is a popular view to see the state as a political entrepreneur, introducing a given environmental policy instrument (e.g. feed-in tariffs for renewable energies) and thus becoming the world market leader or the lead market for the technology in question. Against this backdrop, the present paper explores whether the idea of first-mover and lead market advantages can be confirmed by theories and empirical evidenceDesign/methodology/approach – A wide range of theoretical and empirical papers from the business management and industrial economics literature was reviewed to provide success factors for different timing-to-market and Lead Market strategies of environmental innovations. Findings – A successful innovator is not necessarily the first but very often one of the early movers within the competition of different innovation designs. We show that the success of a timing strategy depends on country-specific lead market potentials, on market and technology characteristics and on the regime of the country-specific regulation. On this basis we derive options for environmental innovation strategies for firms under different circumstances of markets, technologies and regulations.
Research limitations/implications – Future research should concentrate on the question of how lead market advantages can be jointly realized with supply advantages. Patent applications, R&D expenditure, etc. are not unimportant input factors for the innovation, but all these supply-side factors are beyond the focus of this article.
Practical implications – Research on the Lead Market and the timing to market takes centre stage when product innovations are in the development phase. Companies in countries that do not have sufficient above-average Lead Market attributes must target product innovations to fit the preferences of users in the lead market.
Originality/value – This paper is the first to analyse if different timing to market advantages and Lead Market advantages for environmental innovation can be justified by theories and by empirical evidence.
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