Entrepreneurship and innovation in a competition context

• Author: Suela Bylykbashi - Khalil Assala - Gilles Roehrich
• Position: Research Professor in Marketing, Brest Business School FRANCE - Research Professor in Finance, Brest Business School FRANCE - Professor in Marketing, Univ. Grenoble Alpes, F-38040 Grenoble FRANCE
• Pages: 9-31

Academic Journal of Business, Administration, Law and Social Sciences

IIPCCL Publishing, Tirana-Albania

Vol. 2 No. 2

July 2016

ISSN 2410-3918

Acces online at www.iipccl.org

9

Entrepreneurship and innovation in a competition context

Suela Bylykbashi

Research Professor in Marketing

Brest Business School FRANCE

Khalil Assala

Research Professor in Finance

Brest Business School FRANCE

Gilles Roehrich

Professor in Marketing

Univ. Grenoble Alpes, F-38040 Grenoble FRANCE

Abstract

The objective of this research is to explore the relationship between the competitive situation

and the launching strategy of a new product. It also aims to study the internal structure of

the competitive situation. Competition situation is apprehended with 4 variables: strategic

similarity, multimarket competition, market concentration and competition intensity (the rst

three being perceived as antecedents of the last). Launching strategy, strategic similarity and

competition intensity have two internal dimensions: a strategic and a tactical one. Using a

questionnaire, data was collected from 140 managers involved in the recent launching of a

new product in France. The ndings conrmed that competition intensity depends partially

on other variables of the competition situation, and that the laer exert an inuence on the

structure of the launching strategy. These relations vary considerably, according to the sub-

dimensions of the variables. However, other antecedents of competition intensity on the one

hand and of the launching strategy structure on the other hand, are to be sought beyond the

simple competition situation.

Keywords: entrepreneurship, launching strategy, competition intensity, strategic similarity,

multimarket competition, market concentration.

Introduction

Up to the 1980s, entrepreneurship was restricted to creating and developing new

companies. However, the concept of entrepreneurship has been extended, considering

launching new product as corporate entrepreneurship. Jennings and Lumpkin (1989,

p. 489) dened corporate entrepreneurship as ‘‘the extent to which new products

and/or new markets are developed.’’ Several others have emphasized new product

innovation as an important activity in corporate entrepreneurship (Miller, 1983;

Shane and Venkataraman, 2000; Zahra,1995). Consistent with the above stream of

research, our paper focuses on a rm’s new product as a signicant form of corporate

entrepreneurial.

The impact of the launching strategy on new product success has largely been

Vol. 2 No. 2

July 2016

Academic Journal of Business, Administration, Law and Social Sciences

IIPCCL Publishing, Tirana-Albania

ISSN 2410-3918

Acces online at www.iipccl.org

10

demonstrated by past researches (Easingwood and Beard, 1989; Hultink et al., 1997;

Hultink and Robben, 1999; Hultink et al., 2000; Lee and O’Connor, 2003).

Launching a new product is seen by competitors as a potential threat. Studies

carried out on retaliation by competitors in response to the introduction of a new

product show indeed that retaliation may have a negative inuence on new product

performance.

One can equally consider another – indirect – inuence on new product performance

where competition situation directly impacts the launching strategy structure

(Gatignon et al.; 1990; Hultink et al., 1997). However, lile research has focused on

this relationship and in those studies, the competition situation is restricted in market

concentration.

The rst aim of this research is to study how the competition situation impacts the

structure of the launching strategy. It also aims to study the internal structure of the

competitive situation.

The competition situation corresponds to all the relations and interactions which link

competitors on a market and which come exclusively from competition.

Among several facets of competition situation, four have been retained for this

study: competition intensity, strategic similarity, multi-market competition and

market concentration. In the studies dealing with the relations between these four

variables (Peteraf, 1993 ; Ramaswamy & al., 1994; Baum & Korn, 1996 ; Chen, 1996 ;

Gimeno & Woo, 1996; Gimeno, 1999; Jayachandran & al., 1999) competition intensity

is considered as a consequence of the other three. We adopt this point of view and

consider strategic similarity, multimarket competition and market concentration as

the antecedents of competition intensity. However, lile research has focused on the

competition intensity. With the exception of the work of Porter (1980, 2008), Porter ’s

concept of competition intensity has remained a very theoretical one (Chen, 1996).

The second aim of this research is to go deeper into the competition intensity concept

and to identify the inuence that it exerts on the structure of launch strategy.

Launching strategy must be adapted to the context of the market on which the

product is launched: the targeted demand, the competitors in the market and the

role of distribution, at the same time as it depends on the objectives and the resources

available in the organization. Our choice is to concentrate our research exclusively on

the inuence that competition situation may exert on the distribution of resources in

launching strategy.

The reminder of this article is structured as follows: rst we dene the concepts and

present their internal structure. Then we present our conceptual framework and the

hypothesized relationships. Next we explain the research methodology and review

the nding from a simple of 140 managers involved in the recent launching of a

new product in France. Finally, we discuss the results and we explore managerial

implications, limitations and suggestions for further research.

Conceptual framework and literature review

Competition intensity: denition and internal structure

The competition intensity occupies a central position in strategic group (Porter,

1979 ; Caves et Porter, 1977 ; Zajac et Jones, 1989 ; Cool et Dierickx, 1993; Peteraf,

1993), multimarket competition (Gimeno, 1999; Gimeno et Woo, 1999 ; Jaychandran