Market Entry Pattern And Timing In An Industry With Technological Evolution: The Liquid Crystal Display Industry

Abstract

This paper examines whether the process of entering the market, as well as industry-specialized assets and positioning in the applied technologies should differ between early entrants and late entrants in the LCD industry, where the industry evolves and provides different types of displays and where LCD technologies have become major parts of new applied product generations.  The study also investigates whether all firms follow the same strategic decisions upon entering the market when they enter at similar times, whether early or late.  According to the findings, early entry into the LCD industry is positively related to experience in the LCD related R&D activities.  As accumulated outputs are regarded as a measure implied by the standard form of the learning curve, this is consistent with prior studies on first-movers.  Patents most likely protect their technological advantages.  Large-capital late entry into the LCD industry is positively related to company size as these firms have excess capital to spend on R&D.  The late entrants are established firms in their core industries; possess related assets or excess capacities that enable them to enter into the LCD market.  On the other hand, smaller-capital late entrants into the LCD industry have no accumulated R&D activities or production of applied products, which implies that they are free riding off of early entrants’ investment.