1. Available online at www.sciencedirect.com
Journal of Business Research 61 (2008) 925 – 932
Market pioneers, late movers, and the resource-based view
(RBV): A conceptual model
R. Zachary Finney a,⁎, Jason E. Lueg b,1 , Noel D. Campbell c,2
a
University of South Alabama, Mitchell College of Business, Department of Marketing and E-Commerce,
MCOB 356, Mobile AL 36688 0002, United States
b
Mississippi State University, College of Business and Industry, Department of Marketing, Quantitative Analysis,
and Business Law, P.O. Box 9582, Mississippi State MS 39762, United States
c
University of Central Arkansas, Department of Economics, Finance, and Risk Management, 201 Donaghey Avenue,
Conway AR 72035, United States
Received 9 January 2007; accepted 25 September 2007
Abstract
Lieberman and Montgomery note that “…we see benefits from linking empirical findings on first-mover advantages with the complementary
stream of research on the resource-based view of the firm” (1998, p. 1111); they suggest that such a link will help explain differences in firm
performance. Therefore, this study develops a conceptual framework linking FMAs with the resource-based view of the firm (RBV); in doing so,
this framework explains the links between entry timing, resource management, and firm performance. Specifically, this study examines FMAs in
light of a four-step resource management process [Morgan RM. Relationship marketing and marketing strategy: the evolution of relationship
strategy within the organization. In: Sheth JN, Parvatiyar A, editors. Handbook of Relationship Marketing. Thousand Oaks, California: SAGE
Publications, 2000. p. 481–504.; Morgan RM, Hunt S. Relationship-based competitive advantage: the role of relationship marketing in marketing
strategy. J Bus Res 1999; 46 (November): 281–90.] consisting of: 1) efficient acquisition (EA), 2) bundling/combining (BC), 3) positioning
(POS), and 4) maintenance/protection (MP). The link between FMAs and the resource management process helps explain why so few first movers
retain their advantages.
© 2007 Elsevier Inc. All rights reserved.
Keywords: Resources; Capabilities; Resource-based view; First-mover advantage; First mover; Market pioneer; Late mover
1. First-mover advantages (FMAs), late-mover advantages learning curve effects and advantages based on R&D), 2)
(LMAs), and the resource-based view (RBV) of the firm: preemption of assets, and 3) switching costs (Lieberman and
An overview Montgomery, 1988). Market pioneers enjoy FMAs.
However, market pioneering carries potential disadvantages
FMA (first-mover advantage) is the ability of a firm to earn as well (Lieberman and Montgomery, 1988):
above average profits by a) entering a market first and b) entering
the market in a way that thwarts other firms' attempts to compete • Late movers may “free ride” on some of the costs shouldered
in that market (Lieberman and Montgomery, 1988). At least by the pioneer
three bases produce FMAs: 1) technology (product introduction • Large technological or market uncertainties may exist when
entering a market first
• Technology or customer needs may shift after the pioneer
⁎ Corresponding author. Tel.: +251 460 6033; fax: +251 460 7909.
enters the market
E-mail addresses: zfinney@usouthal.edu (R.Z. Finney),
jlueg@cobilan.msstate.edu (J.E. Lueg), Ncampbell@uca.edu (N.D. Campbell).
• First movers may suffer from “incumbent inertia.” That is,
1
Tel.: +662 325 7011; fax: +662 325 7012. first movers may fail to change their business practices as the
2
Tel.: +501 852 7743; fax: +501 450 5302. product market changes
0148-2963/$ - see front matter © 2007 Elsevier Inc. All rights reserved.
doi:10.1016/j.jbusres.2007.09.023

2. 926 R.Z. Finney et al. / Journal of Business Research 61 (2008) 925–932
1.1. Resource-based view (RBV) of the firm 1.3. Resource management
The RBV explains how firm resources drive differences in firm While many conceptualizations of the resource management
performance. Critics of the RBV assert that broad conceptualiza- process exist, this paper uses Morgan's (2000) conceptualization
tions of firm resources ignore important differences in firm assets because Finney et al. (2005) established empirical support for
and firm abilities (Priem and Butler, 2001). Therefore, scholars Morgan's work. Morgan (2000) conceives of resource manage-
ditinguish between firm resources and firm capabilities (c.f., Amit ment as a four-step process: 1) efficient acquisition (EA), 2)
and Schoemaker, 1993; Dutta et al., 2005; Greenley et al., 2005; bundling/combining (BC), 3) positioning (POS), and 4)
Helfat and Peteraf, 2003; Mahoney, 1995; Makadok, 2001). A maintenance/protection (MP).
resource is a tangible or intangible asset. Resources “can be valued
and traded—such as a brand, a patent, a parcel of land, or a license” 1.3.1. Efficient acquisition (EA)
(Hoopes et al., 2003, p. 890). Individual employee skills are also Firms must possess resources before they can create value with
resources (Hoopes et al., 2003; Lieberman and Montgomery, those resources. However, the firm must pay less for resources
1998). “Resources are converted into final products or services by than they are worth. EA ensures that the price (P) the firm charges
using a wide range of other firm assets and bonding mechanisms” customers exceeds the firm's resource costs (C). Lower resource
[emphasis in original] (Amit and Schoemaker, 1993, p. 35). acquisition costs allow firms to sell products profitably at prices
On the other hand, capabilities are “…a firm's capacity to low enough to entice people to buy. If a firm fails to hold down the
deploy Resources…using organizational processes, to effect a acquisition costs (C), competitors that minimize acquisition costs
desired end” [emphasis in original] (Amit and Schoemaker, can offer the same value at a lower price.
1993, p. 35). A capability is intangible; firms cannot quantify
(i.e., “value”) their capabilities. A capability is a firm's capacity 1.3.2. Bundling/combining (BC)
to undertake a specific activity (Hoopes et al., 2003; Lieberman Following acquisition, the firm creates customer value by
and Montgomery, 1998). Under this framework, resource man- “fusing” single resources into complex products. These offerings
agement is a capability. Resource management is the set of must provide customer value that exceeds the cost paid by the
strategic choices concerning the firm's tangible and intangible firm (V N C). If a firm's strategist succeeds at BC, the firm attains
assets. So strategists can use resource management to generate a complex set of “higher order resources” that are difficult for
SCA (Mahoney and Pandian, 1992; Penrose 1959). rivals to imitate (Morgan, 2000; Morgan and Hunt, 1999).
1.2. Value, price, and cost: The VPC framework 1.3.3. Positioning (POS)
POS shapes the consumer's view of a product (Ries and
SCA does not directly flow from resources that are valuable, Trout, 1986). Even if a firm attains resources at good prices and
rare, inimitable, and non-substitutable (Priem and Butler, 2001; combines them into a desirable product, the product still may
Barney, 1991). Instead, “the relative difference in the amount of not sell. The firm must also create an image (or position) for the
value generated by firms… is elemental to competitive advantage” product that makes consumers want to buy. POS serves to
[emphasis in original] (Priem and Butler, 2001, p. 29). Firm gene- widen the difference between value and price (V − P).
rated “value is the fundamental concept determining the extent of Customers will prefer a firm's offerings as the gap between
competitive advantage” [emphasis in original] (Priem and Butler, the value and price of the offerings widens relative to the gap
2001, p. 29). between the value and price of competing offerings.
Hoopes et al. (2003) explain value's role in the RBV through
a bargaining model that consists of value, price, and cost (see 1.3.4. Maintenance/protection (MP)
also Tirole, 1988). This model illustrates both the buyer's and The unique sequence of EA → BC → POS that produces
the seller's perspectives. Here, buyer and seller bargain over a superior results at one point in time may not provide customer
product's price (P); the product provides value (V) to the buyer value at another time. Firms, therefore, must continually adjust
and costs the seller some sum (C) to produce. “Value is the price their resource management strategies (i.e., must maintain their
a buyer is willing to pay…” [emphasis in original] (Hoopes resources). Similarly, managers must protect resources; man-
et al., 2003, p. 891). Therefore, for the customer, value provided agers cannot allow competitors to duplicate their resources.
must exceed the product's price (V − P). The seller wants to Firms use MP to realign their resource management decisions
maximize the difference in the product's price and cost (P − C). regarding EA, BC, and POS. This paper differentiates between MP
“The supplier's resources and capabilities, in turn, influence the activities relating to efficient acquisition (MPEA), bundling/
value of the good to the buyer and/or the cost of producing it… combining (MPBC), and positioning resources (MPPOS). There-
[T]he firm that produces the largest difference between value fore, the firm uses MP to preserve the gaps between price and cost
and cost has an advantage over rivals” (Hoopes et al., 2003, (P −C), value and cost (V –C), and value and price (V –P).
p. 891–892).
“Value arises from the firm's resources and how those 2. Crafting first-mover advantage (FMA)
resources are managed” [emphasis in original] (Morgan, 2000,
p. 496). One may surmise, therefore, that resource management If a firm a) minimizes resource procurement costs (C) and b)
is the key “lever” the strategist uses to create SCA. extracts value (V) from those resources in excess of the resources'

3. R.Z. Finney et al. / Journal of Business Research 61 (2008) 925–932 927
cost (C), the firm efficiently acquired resources (Morgan, 2000). Kodak's early success illustrates the benefits of linking
Suppose a first mover's resource costs are higher than the resource superior BC to superior POS:
costs of rival firms. If the first mover offers more customer value
“[George Eastman]…designed a system whereby consumers
than the rivals offer from a given set of resources, an FMA is still
took pictures with a returnable camera, mailed in the camera
possible. However, high pioneer resource costs provide a chance
with the exposed film for developing, and received the
for imitators to compete using a low cost strategy.
developed pictures and a reloaded camera. The company's
In the airline industry established “legacy carriers” (such as
slogan, ‘You press the button, we do the rest,’ convinced
Delta, United, and American) have higher costs than newer,
consumers that photography was finally available to
“discount carriers” (such as Southwest and JetBlue) (Anony-
amateurs” (Tellis and Golder, 1996, p. 68).
mous, 2005). These older airlines inefficiently acquire their
resources. As a result, many legacy carriers have declared Therefore:
bankruptcy and cut costs (Manor and Chandler, 2003).
P3A. Firms that combine high skill in a) acquiring resources
Hence, the following propositions:
efficiently, b) bundling/combining individual resources, and
P1A. The level of firm resource costs is negatively correlated c) appropriately positioning resources are more likely to
with the firm's chances of becoming a product pioneer. become market pioneers than are firms that lack these three
skills.
P1B. The level of firm resource costs is negatively correlated
with the firm's chances of becoming a market pioneer. In the short run, market pioneering should increase the firm's
sales, at least while the new product enjoys a monopoly (P3A).
P1C. The level of firm resource costs is negatively correlated
However, this is by no means analogous to a first-mover ad-
with the firm's chances of attaining a first-mover advantage
vantage. Successful market pioneering is certain to attract rivals;
(FMA).
as noted, few market pioneers retain market leadership. So the
BC allows the firm to become a product pioneer. To become a short-term value created by the market pioneer for any given
product pioneer, a firm goes beyond resource acquisition and segment is a function of the pioneer's skill at providing value to
uses BC to create “higher-order” resources (Morgan, 2000; that segment through a) efficient resource acquisition, b)
Morgan and Hunt, 1999). BC helps link resource acquisition and bundling/combining resources, and c) positioning resources —
the products that the firm eventually sells. If a strategist ignores or:
bundling/combining he or she will likely be stuck with a set of
incompatible resources (Wernerfelt, 1984). STCVSEG ¼ f ðFMVEA ; FMVBC ; FMVPOS Þ
Though not the product pioneers, Matsushita, JVC, and Sony
were the first companies to market VCRs successfully to the STCVSEG short-term customer value for a given segment
mass market (Tellis and Golder, 1996). Superior BC was central FMVEA value created by the first mover through efficient
to their success. “At JVC, Yuma Shiraishi, manager of video resource acquisition
recorder development, provided just a few guidelines to his FMVBC value created by the first mover through bundling/
engineers: develop a machine that could sell for $500, while combining
using little tape and retaining high quality picture” (Tellis and FMVPOS value created by the first mover through positioning
Golder, 1996, p. 68). Taken together, this bundle of resources
propelled these three firms to a dominant position in the VCR Suppose the pioneer enjoys a monopoly in a new product
market. In summary: market. Here one need only consider the value created by the
pioneer. The amount of value the pioneer creates for a given
P2. Firms that combine high skill in a) acquiring resources
segment through these three steps determines whether that
efficiently and b) bundling/combining individual resources into
segment buys the pioneer's offering. If rivals subsequently enter
higher-order resources are more likely to become product
the market, one also must consider consumer reaction to the
pioneers than are firms that lack these two skills.
competing products. In summary:
A firm that acquires a valuable set of resources and uniquely
P3B. Firms that combine high skill in a) acquiring resources
bundles/combines them may well become a product pioneer. Still,
efficiently, b) bundling/combining individual resources, and c)
no financial benefit accrues until the firm offers that bundle of
appropriately positioning resources will have higher short-run
resources for sale; (i.e., the firm must also become a market
sales of new products than will firms that lack these three skills.
pioneer). To sell new products successfully, market pioneers must
ensure that they create the proper image – or positioning (POS) – As time passes, the firm's initial resource base will “age”;
for the new product. also, successful market pioneering will almost certainly spur
However, good BC, ironically, may complicate POS. New market entry by rivals. The first three steps of the resource
products may be extremely difficult to position (Suarez and management process (EA → BC → POS) cannot provide long-
Lanzolla, 2005). The potential breakdown between BC and term customer value (LTCV). Over time, the first mover must
POS helps explain why so many product pioneers either a) fail also maintain and protect (MP) the initial resource position.
to become market pioneers or b) become market pioneers but But how may a first mover improve firm resources after
fail to retain their market leadership. market entry? Under this framework, the first mover must

4. 928 R.Z. Finney et al. / Journal of Business Research 61 (2008) 925–932
rethink the three initial resource management decisions while protecting those resources are more likely to attain first-mover
keeping firm resources from competitors. (The labels for these advantages than are firms that lack these characteristics.
three “updating” tasks are: FMVMPEA, FMVMPBC, FMVMPPOS;
Fig. 1 illustrates the links between the FMA and RBV
these tasks describe the value first movers add by updating the
concepts; more specifically, the Figure shows the benefits the
initial decisions regarding resource acquisition, bundling/
first mover stands to gain by successfully managing each of the
combining, and positioning respectively).
four resource management tasks. In doing so, Fig. 1 describes
A look at recent innovations shows that market leadership
how a firm attains FMA.
is difficult to retain. Consider the gaming console and laptop
Fig. 1 encapsulates the argument contained in the preceding
computers:
paragraphs. Resource management is a firm capability and is the
“In the gaming console market…at least six generations of “lever” the firm uses to create FMA. Resource management is a
technology emerged in rapid, succession, each pushing four-step process: 1) efficient acquisition (EA), 2) bundling/
forward a new winner. The same thing happened in hard combining (BC), 3) positioning (POS), and 4) maintenance/
drives, and laptop computers.…laptop technology evolved protection (MP). Firms must first efficiently acquire resources
so quickly that each successor, after, briefly achieving and then bundle/combine these resources into higher order
dominance, was soon supplanted itself” (Suarez and offerings; this allows the firm to create an innovative product
Lanzolla, 2005, p. 126). (i.e., become a product pioneer). To create FMA the firm must
also become the first firm to sell that product (i.e., become a
So, long-term customer value for a given target market is a market pioneer). Positioning involves attracting customers;
function of the value provided to that segment by the market positioning, therefore, allows the firm to succeed as a market
pioneer's initial a) resource acquisition, b) bundling/combining, pioneer.
and c) positioning and d) the market pioneer's subsequent Critically, the firm must complete the resource management
efforts to maintain/protect each of those sets of resources the process. In addition to EA, BC, and POS, the firm seeking FMA
pioneer built in a, b, and c. Or: must also maintain and protect (MP) resources. As time elapses,
firms use MP to realign their resource management decisions
regarding EA, BC, and POS. Firms that combine high skill in a)
LTCVSEG ¼ f ððFMVEA ; FMVMPEA Þ; ðFMVBC ; FMVMPBC Þ;
acquiring resources efficiently, b) bundling/combining individ-
ðFMVPOS ; FMVMPPOS ÞÞ ual resources, c) appropriately positioning resources, and d)
maintaining and protecting those resources are more likely to
attain and then retain FMAs than are firms that lack these
LTCVSEG long-term customer value for a given segment characteristics.
FMVEA value created by the first mover through efficient
resource acquisition
FMVMPEA value created by the first mover through maintain- 3. Late-mover responses
ing/protecting resource stocks
FMVBC value created by the first mover through bundling/ Pioneers can attain FMA; yet, in a given market, most firms
combining will be followers. Research also reveals that late-market entry is
FMVMPBC value created by the first mover through maintain- often profitable (c.f., Srinivasan et al., 2004). Resource
ing/protecting bundles/combinations of resources management can permit late movers to “compete away” FMAs.
FMVPOS value created by the first mover through positioning P5A–P5E evaluates a market in which the first mover is
FMVMPPOS value created by the first mover through main- faced with a rival. For the first time, the customers have the
taining/protecting positioning of firm resources option to buy from a firm other than the first mover. So, P5A–
P5E examines what the first mover must do to retain market
The importance of maintaining/protecting resources is leadership after competitors enter the market. The first
twofold. First, under the RBV, resources are the foundation of mover's ability to create value for a given segment is still a
firm success. Second, firms may build resource stocks only over function of the firm's: a) initial resource management
long periods of time (Dierickx and Cool, 1989; Pettus, 2001). A decisions and b) subsequent attempts to maintain/protect
firm that fails to maintain resources, therefore, faces a long those resources. But here the late mover also creates value for
journey in trying to catch rival firms. the first mover's target market; specifically, the late mover's
Research supports the importance of maintaining and pro- skill at the first three resource management tasks also offers
tecting resources. Success does not flow from a static set of some level of value to the first mover's customers. (The late
resources (McGee and Thomas, 1994). Similarly, scholars assert mover need not maintain/protect resources to take leadership
that order of entry effects tend to dissipate over time (Brown and away from the pioneer but need only devise a product that
Lattin, 1994; Huff and Robinson, 1994). Therefore: provides more value relative to price or cost. The late mover
that elects to stay in the market for a long time will need to
P4. Firms that combine high skill in a) acquiring resources maintain/protect resources.)
efficiently, b) bundling/combining individual resources, c) How does a firm attain superiority when faced with
appropriately positioning resources, and d) maintaining and competition? The first mover's resource management skill

5. R.Z. Finney et al. / Journal of Business Research 61 (2008) 925–932 929
Fig. 1. First-mover advantage and resource management.
determines the first mover's competitive position, relative to value provided to the segment by the pioneers' initial resource
how well rivals manage their resources. Suppose the first management process (EA → BC → POS) and the subsequent
mover provides more value to a given segment. Here the first value created by maintaining/protecting the resource position is
mover can expect to “best” rivals. What if the late mover greater than the total customer relative value provided to the
provides more value to a particular segment? The first mover's segment by the late mover through resource management (EA
leadership will be at an end. A situation in which the pioneer → BC → POS).
and the late mover provide equal value to a customer segment
is possible; but equality will be temporary. In open markets, as ½VSEGfm ¼ f ððFMVEA ; FMVMPEA Þ; ðFMVBC ; FMVMPBC Þ;
firms continually alter their resource bases, customer value
provided also changes. ðFMVPOS ; FMVMPPOS ÞÞŠ N
Consider General Motors. GM's managers claim that they
have many plans aimed at restoring GM's profitability. Seen ½VSEGlm ¼ f ðLMVEA ; LMVBC ; LMVPOS ÞŠ
from this paper's perspective, these initiatives fall under the
headings of maintaining and protecting GM's resource acqui- VSEGfm customer value first mover provides for a given
sition (MPEA), bundling/combining (MPBC), and positioning segment
(MPPOS) capabilities. FMVEA value created by the first mover through efficient
General Motors has taken a number of steps to cut resource resource acquisition
acquisition costs (i.e., more efficiently acquire resources). GM's FMVMPEA value created by the first mover through maintain-
management has pressed a major supplier, Delphi, to cut prices ing/protecting resource stocks
(McCracken, 2006). Similarly, GM has tried to bundle/combine FMVBC value created by the first mover through bundling/
resources differently to produce better cars. GM recently an- combining
nounced plans to spend over half a billion dollars to improve FMVMPBC value created by the first mover through maintain-
engines, transmissions, metal stamping, and body shops (Chon, ing/protecting bundles/combinations of resources
2006). Finally, GM has been using auto shows as venues to FMVPOS value created by the first mover through positioning
reposition GM as a company that can sell more than trucks and FMVMPPOS value created by the first mover through main-
sport-utility vehicles (Lundegaard, 2006). taining/protecting positioning of firm resources
So: VSEGlm customer value late mover provides for a given
segment
P5A. A first mover will outperform a given late mover in LMVEA value created by the late mover through efficient
serving a given segment as long as: the total customer relative resource acquisition

6. 930 R.Z. Finney et al. / Journal of Business Research 61 (2008) 925–932
LMVBC value created by the late mover through bundling/ Kodak's multi-faceted innovation made catching up much more
combining difficult for competitors. Consequently:
LMVPOS value created by the late mover through positioning
P5D. Late movers that add value through more than one
Under this framework, then, no “absolute advantage” to market
resource management task will be more successful than those
pioneering exists. Hence, “A firm should focus its resources on the
that add value through a single resource management task.
scenario under which it has the strongest position relative to its
competitors” (Wernerfelt and Karnani, 1987, p. 191). Likewise: P5B, P5C, and P5D pertain to what Schumpeter (1942) refers
to as “creative destruction.” What if a latecomer innovates on
“…Some firms excel at leading whereas others excel at multiple resource management activities? Such a firm has the
following, unless the effects of managerial skills are taken into potential to follow in the footsteps of those firms that have
account in estimating the impact of pioneering on per- “revolutionized the economic structure by destroying the old
formance, one might mistakenly conclude that, for all firms, and creating a new one” (Schumpeter, 1942, p. 83).
the act of pioneering itself will lead to an unambiguous Scholars state that “Firms develop resources over time in a
advantage” (Kerin et al., 1992, p. 48; Moore et al., 1991). complex, path dependent process” (Pettus, 2001, p. 889; see also
Dierickx and Cool, 1989). Hence, in the short run, firms find it
Kerin et al. (1992) propose that market changes tend to weaken difficult to “compete away” rivals' advantages when those
FMAs. This framework helps explain why they are correct. advantages are based on complex, difficult-to-imitate resources.
Assume a late mover enters a market with a radically-innovative The longer a late mover waits to enter a given market, therefore,
product. The new product may destroy the value created by the the longer the first mover can progress down the resource
first mover's resource base. Hence, the length of first-mover development path. Research supports this assertion; Robinson
advantages will be inversely proportional to the rate of and Min (2002) and Coeurderoy and Durand (2004) discovered
technological change in an industry (Suarez and Lanzolla, 2005). that the temporary monopoly enjoyed by a first mover contributes
Scholars suggest that severe market disruptions after market to the first mover's longevity in the marketplace.
pioneering do not solely stem from late movers entering the At least two important qualifications exist in regard to the
market. Consumer changes also play a role. Shoppers who wait preceding paragraph. First, what if a first mover enters a market
to buy improved versions of a formerly-new product may have and then “stands pat” with the original set of resources? This
entirely different preferences than the early adopters who pur- firm will waste the chance to make the resources more difficult
chased from the pioneer. After pioneering, both market and for late movers to imitate. Second, think about a late mover that
product changes are likely; both changes challenge first movers enters a market on the basis of a radical innovation; the late
that attempt to retain their initial advantages. Hence: mover may not need to spend time copying an incumbent's
outdated resource base.
P5B. The amount of product change subsequent to market
In regard to the first qualification, in most cases even a
pioneering will be positively related to the probability of a late
relatively stable resource base will change with time; under
mover becoming the leader in that market.
these circumstances, time elapsed between market pioneering
P5C. The amount of market change subsequent to market and late-mover entry is still a positive for the incumbent.
pioneering will be positively related to the probability of a late Similarly, for the second qualification, radical innovations can
mover becoming the leader in that market. certainly destroy incumbents. True radical innovations, how-
ever, should be relatively rare; copying the first mover's
How may the first mover compete after a rival successfully
resource base (or parts of this base) should be attractive to most
enters with a radical innovation? The only feasible means would
late movers. So:
be a massive investment in a new set of resources. (More
specifically, the first mover would emphasize: FMVMPEA, P5E. Time elapsed between market pioneering and competitors'
FMVMPBC, FMVPOS). Even for those first movers possessing attempts to enter a particular market will be positively linked to
the funds needed to realign their resources, such a change will be the duration of the market pioneer's SCA.
painful. Indeed, “incumbent inertia” is the rule when late movers
enter (Lieberman and Montgomery, 1998).
Consider a late mover that wants to “compete away” the first 4. Conclusion
mover's initial advantages. This framework reveals that the
degree of change introduced by any single innovation is not the During the debates surrounding FMA, critics have pointed
only factor determining how strongly the latecomer challenges out that market pioneering is not synonymous with first mover
the first mover. The quantity of innovations by the latecomer is advantage. This paper examines the tenuous links between
also important. A late entrant that attacks by successfully inno- market-entry timing and SCA. Market-entry timing is not a
vating on more than one resource management task creates a panacea, but is instead one part of firm strategy. Therefore, this
situation in which the first mover must make more changes (i.e., paper considers both the impact of a) creating FMAs and b)
invest more money and time) in an effort to retain the FMA. managing FMAs subsequent to market pioneering. Previous
Again, Kodak in the 1800s was a firm that innovated on multi- frameworks tend to focus on the former issue while ignoring the
ple resource-management tasks (Tellis and Golder, 1996); latter.

7. R.Z. Finney et al. / Journal of Business Research 61 (2008) 925–932 931
While the paper makes no specific predictions as to how agement skill would be a better measure than time spent on
many first movers will retain the lead in their markets, the paper the resource management tasks.
contrbutes to a growing body of work that helps explain why so Measurement of market-entry timing has proven difficult for
few first movers succeed in the long run. Pioneers often invest scholars. Golder and Tellis advocate using the “historical method”
so heavily in the resources needed to bring an innovation to to study FMA (1992). In the historical method, scholars search
market that they cannot bear to adopt a new set of resources as archival material to collect longitudinal data about past events
the market shifts. But, the wise pioneer will “bite the bullet” and (Golder, 2000). Given that Golder and Tellis published several
reinvent the firm's resource base (Chandy and Tellis, 1998). strong studies using the historical method, other scholars should
Indeed, research shows that incumbents have chances to in- also consider adopting the historical method to study FMAs.
novate after market entry (Chandy and Tellis, 2000).
4.3. Extensions
4.1. Managerial implications
The possible extensions of this study are vast; the following
A firm interested in attaining and maintaining a competitive suggestions by no means constitute a comprehensive list.
advantage by pursuing a position as a market or product pioneer Readers should note that the framework in this paper
needs to focus on effective resource management via EA (P1A, assumes that the late mover and the first mover compete only to
P1B, and P1C), BC (P2), POS (P3A, P3B), and MP (P4). In serve a single market segment. Obviously, many companies
addition, prospective first movers should ensure that the four serve more than one “type” of customer; if a late mover can
resource management steps are consistent with the firm's stra- distinguish more than one segment in the first mover's customer
tegy (e.g., differentiation, low-cost). Also, the firm's resource base, then the framework would change considerably. The late
management process must evolve while remaining congruent mover could focus on serving only one “sub-segment” of the
with the firm's strategy (whether or not the strategy remains first mover's market, rather than attempting to compete for
constant or evolves over time). precisely the same segment as the first mover. By narrowing the
Strategists must tailor the firm's resource management focus, the late mover could create a situation where the first
capabilities to attain and maintain an FMA. For instance, in a mover would have difficulty defending the entire target market.
stable environment, MP becomes a key step to protect One extension would be to further consider this type of late-
organizational resources. In a more dynamic environment, EA entry strategy.
becomes a key — a firm should focus on attaining necessary Similarly, the framework compares the first mover to a single
resources at the lowest possible costs. In any environment, BC late mover. But what if many firms enter the market? If more
allows the firm to produce a desirable offering for the target than one late mover enters, the first mover has a much more
market; similarly, in any environment POS explains to the target difficult task ahead. Different segments will value the same set
market why the firm's offerings are relevant and desirable. of resources differently, and the first mover may see the original
Superior resource management allows a firm to translate short- mass market carved into numerous small markets by multiple
term advantages (P3B) into FMAs (P4, P5A). late movers. To compete in each sub-segment, the first mover
would have to devise a different resource management plan for
4.2. Measurability each sub-segment. An extension should address this scenario.
Another extension would be to further explore the
The most valuable extension of this paper would be to test association between Morgan's (2000) four resource manage-
the propositions. Such a study would require measures of the ment tasks and customer value. While customer value is a
two major concepts under study here: resource management function of these tasks, the precise manner in which these
and FMA. Much discussion revolves around appropriate resource management tasks coalesce (additively, multiplica-
measurement when using the RBV; fortunately, Finney et al. tively, etc.) to produce customer value is left as an empirical
(2005) measures each of the four steps in resource man- question. Such a study would likely require longitudinal data
agement. These authors measured the amount of time stra- measuring entry timing, resource management, and perfor-
tegists spent on each of Morgan's four resource management mance from multiple firms.
tasks. (Specifically, they asked respondents what percentage The above paragraphs, therefore, constitute what Wernerfelt
of their time managing resources was devoted to each of the (in a somewhat different context) called “a first cut at a huge can
four resource management tasks; all answers summed to of worms” (1984, p. 180). Nevertheless, Lieberman and
100%.) These authors then linked time spent on resource Montgomery (1998) called for an integration of the RBV and
management to firm strategy. (Specifically, they tested wheth- the FMA literatures; this study answers their call.
er a firm's overall strategy (low cost or differentiation) pre-
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