When is a Good Time? Market Entry Timing from Competitive Dynamics Perspective: Case of Asia-Pacific Low Cost Airlines

Market entry timing has been previously studied in conjunction with firm’s internal resources as well as market and industry general landscape. In this study, the authors focus on dyadic relationship between new comer and existing incumbent in low cost airline industry, expressing through elements of Market commonality and Resource similarity, instead of evaluating competition by general industry measures and standards as previous studies did. The authors also set out to detect if market growth potential influences these relationships. In addition, our study reexamines whether market entry timing results in a substantial difference in post-entrance performance. Using a sample of 38 low cost airlines in East Asia, Australia and New Zealand, the authors studied market entry speed of early follower in 155 new markets (airline route) by analyzing their Market commonality and Resource similarity with existing incumbent in each market in relation to Awareness- Motivation-Capability perspective. Besides, the growth potential of each market, measured by market size, is applied as a moderator for the relationship between dyadic competition elements and entry speed. The difference in performance between early follower and the pioneer is then evaluated against the entry timing of the second mover. The result of our study suggests that dyadic competition between the pioneer and the early follower indeed has an impact on early follower’s entry timing, with little regards to market growth potential. Market commonality is a stronger predictor of entry speed compared to Resource similarity, and the interaction between them leads to balancing effect against the individual factors. Earlier entrance has also been confirmed to have a positive effect on the early follower’s performance. Theoretically, the authors study contributed to market entry research a new perspective of analyzing competition, bridging the gap between competitor analysis and prediction of inter-firm rivalry (entrance timing). In practice, the authors results suggests that early follower is wary of multi-market retaliation and possibly delay such confrontation with a big, direct competitor. On the other hand, pioneering firms can consider possible early aggressive expansion strategy to fence off potential followers.


  • English

Media Info

  • Media Type: Digital/other
  • Pagination: pp 319-331
  • Monograph Title: Proceedings of the International Forum on Shipping, Ports and Airports (IFSPA) 2019: Beyond Breakthroughs, Above Excellence

Subject/Index Terms

Filing Info

  • Accession Number: 01744577
  • Record Type: Publication
  • ISBN: 9789887408406
  • Files: TRIS
  • Created Date: Jun 30 2020 5:43PM