Entry Barriers: A Dull-, One-, or Two-Edged Sword for Incumbents? Unraveling the Paradox from a Contingency Perspective

Publication Type

Journal Article

Publication Date

1-2001

Abstract

The long-held precept of equating entry barriers with sustainable incumbent advantage increasingly is met with skepticism as incidents of innovative late entrants leapfrogging over market incumbents become more pervasive across industries. Ostensibly, the reassessment of the traditional assumptions underlying entry barrier strategy has become imperative; to this end, a study presents a framework that investigates the contingent effects of incumbents' barrier building on their own performance. Specifically, the study examines 5 types of entry barriers (capital requirements, cost advantages, switching costs, distribution access, and proprietary assets) for the nature of their impact in the following presupposed yet unresolved roles: as effectual versus ineffectual entry deterrents and as enablers versus inhibitors of incumbents' innovativeness. In addition, the study takes other variables into account to identify the contingencies of the framework. Using data from Korean consumer product industries, the study empirically tests and substantiates the variable impact of entry barriers on incumbents' performance.

Keywords

entry barriers, contingency effects, firm performance, incumbent advantage, switching costs

Discipline

Business | Marketing

Research Areas

Marketing

Publication

Journal of Marketing

Volume

65

Issue

1

First Page

1

Last Page

14

ISSN

0022-2433

Identifier

10.1509/jmkg.65.1.1.18133

Publisher

American Marketing Association

Additional URL

https://doi.org/10.1509/jmkg.65.1.1.18133

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