Pioneering Versus Following in Emerging Markets: Communities in Private-Collective Innovation

The issue whether to pioneer or to follow is as old as strategic management itself. Put shortly, there are two opposite perspectives. Conventional literature on management claims that it pays to be first in a new market. However, this perspective was challenged during the last decade. The latter perspective argues that it is more wise to let others develop the market first and enter it when it turns out to be attractive. Evidence from practice derives exclusively from developed and mature markets such as the US or EU. Yet, in the context of EM there virtually exists no research on this issue. Therefore, this study aims to shed light on the above debate by investigating the automotive industry in two of the most important EM - China and Brazil. The research reveals how order-of-entry advantages develop and what factors enhance or mitigate them in a highly protected market context. Strategic implications are drawn for each group of entrants. As a firm is more often a follower than a pioneer, this study focuses on how followers should enter into EM and what kind of resources they need to establish successfully at the new terrain.