First-mover advantages are gained by those companies that are the early entrants to an industry

Under a Creative Commons license

Open access

Highlights

•

Previous research is inconsistent in its assessment of first-mover (dis)advantages.

This study is the first to transfer first-mover theory to web-based social businesses.

The first-mover theory is extended to include considerations of the winner-take-all hypothesis.

Results show that first-mover advantages in the markets examinded do not exist only for the very first to market.

Abstract

Achieving the optimal market entry time is of immense strategic importance for entrepreneurs, especially in online markets, where web-based social entrepreneurial activity continues to grow. This raises the question of whether first-mover market entry actually pays off or if market entry as a (later) follower might be the better option. First-mover research has so far not adequately answered this question. Our work contributes to closing this gap by transferring first-mover theory to web-based social enterprises. We expand upon first-mover theory by reflecting on the winner-take-all hypothesis to better illuminate the mechanisms of market structure development and entry decisions. Our empirical data was gathered on various types of web-based social enterprise models in a sample of 12 national markets. Our results show that first-mover advantages are available not only to those who are the very first to market but also to early followers. In addition, the speed of market entry matters. Our work also indicates, however, that first-mover advantages should not be overestimated; market structures and network effects may explain varying results. Furthermore, both business models studied exhibited high market concentration at a mature stage, implying that the winner, although perhaps not taking all, does take most.

Keywords

Web-based social business

Social entrepreneurship

First mover

Early followers

Jantje Halberstadt is Full Professor of Economics and Sustainability at the University of Vechta, Germany, where she is also Dean of Studies at the Faculty of Education and Social Sciences. Her main research interests are in the field of entrepreneurship and management, particularly transformational sustainability entrepreneurship. She holds a PhD from the Carl von Ossietzky University of Oldenburg and was Junior Professor for Social Entrepreneurship at the Leuphana University in Lüneburg where she still is Guest Professor. Prof. Halberstadt lectures abroad at different universities and leads several trans- and interdisciplinary research projects within international networks.

Sophia Kollhoff is Junior Researcher at the University of Vechta, Germany. She completed a Master's degree in Agriculture and Food Science at the University of Osnabrück, Germany. Her research focuses on (sustainability) entrepreneurship.

Sascha Kraus is Full Professor of Management at the Free University of Bozen-Bolzano, Italy, and Distinguished Visiting Professor (SARChI Entrepreneurship Education) at the University of Johannesburg, South Africa. He holds a doctorate in Social and Economic Sciences from Klagenfurt University, Austria, a Ph.D. in Industrial Engineering and Management from Helsinki University of Technology and a Habilitation (Venia Docendi) from Lappeenranta University of Technology, both in Finland. Before, he held Full Professor positions at Utrecht University, The Netherlands, the University of Liechtenstein, École Supérieure du Commerce Extérieur Paris, France, and Durham University, United Kingdom, as well as Visiting Professor positions at Copenhagen Business School, Denmark and at the University of St. Gallen, Switzerland.

Amandeep Dhir is Full Professor of Research Methods at University of Agder, Norway. He is also a visiting professor at Norwegian School of Hotel Management, University of Stavanger, Norway. His research appears in the Journal of Retailing and Consumer Services, International Journal of Information Management, Computers in Human Behaviour, Computers in Industry, International Journal of Hospitality Management, Journal of Cleaner Production, Food quality and preferences, Appetite, Information Technology & People, Australasian Marketing Journal, Enterprise Information Systems and others.

© 2022 The Authors. Published by Elsevier Inc.