The document discusses optimal timing of entry into new markets and with new products. It notes that while first movers may capture more of the market, consumers need time to adopt new products, and later entrants can improve on initial offerings. The optimal timing depends on factors like customer understanding, the size of technological improvements, the maturity of related technologies, competitive threats, and industry characteristics. Case studies of Huawei and the iPhone demonstrate how later entrants can succeed by improving existing technologies and entering markets at optimal times after standards and customer needs are established.

1. Timing of Entry
Introduction:
Timing is very important strategic tool for companies when launching a product although many
would claim that being the first in the market is the best way to capture the market but when a
new product is brought to a market, it takes sometimes for consumer to master the product.
Entering a New Market:
There are always some risk involves when a company decides to expand it business into a new
market. It needs to set the ground work to make sure that the product timing is accurate
otherwise the company will face several obstacles in entering in a new market.
Types of Entrants:
Entrants are divided into 3 categories:
01. First movers:
The first entrant to introduce new product and service to sell them in a market.
02. Early followers:
Entrants that are early to market, but not first.
03. Late entrants:
Entrants that do not enter the market until the time the product begins to penetrate the
mass market or later.
FACTORS INFLUENCING OPTIMAL TIMING OF ENTRY
In very early market stages, a technology may be underdeveloped and its fit with customer needs
unknown. In late market stages, a technology may be well understood, but competitors may have
already captured controlling shares of the market. How does a firm decide whether to attempt to
pioneer a technology category or to wait while others do so?

2. The answer will depend on several factors, including:
 customer certainty.
 the margin of improvement offered by the new technology.
 the state of enabling technologies and complementary goods.
 the threat of competitive entry.
 the degree to which the industry exhibits increasing returns.
 the firm’s resources.
Case study of Huawei- A Chinese Technology Enterprise
Huawei is a private hi-technology company. It is a leading telecommunication, equipment
manufacturer in china. In 2005 Huawei sales are 8.2 billion of which 4.8 billion are from foreign
market.
There are four different factors or modes of entering an international market.
1. No regular export activates.
2. Export via independent representatives (agent)
3. Establishment of overseas subsidiary.
4. Overseas production or manufacturing limits.
The industrialization process of Huawei is successful till now. This success depends on
the appropriate market entry mode choice and market strategy employed. The first
strategy of Huawei is that its setup a joint venture to beta-Huawei and Russian telecom to
develop revian market in 1997. Huawei choose Russia because of its good relationship
with their home country and this could be done by their own advantage technological
research and development. Huawei started to enter in Asia, middle-east and north Africa
market by using export method to enter this market. Huawei sent out many sales and
service engineers from home country to setup branches and service center in these
countries.

3. After 2001, Huawei products start to be sold in west Europe and north America in these
developed countries by applied contractual mode to entry. This method includes franchising, co-
research, co-production and co-sale. The firm factor and environmental factor are situational
influence that effect the international entry mode choice. The firm factor includes internal
environment of firm and their strategy. The environment factor means demand and competition,
socio culture condition and political environmental condition.
Strategic Timing of Entry
Evidence from Video Games
Market for entertainment goods like music, books and videos games are characterized by a
continuous flow of new product introduction. Most entertainment goods share a common out
come of much less price variation. New hit song from top artist can often be downloaded at the
same price as niche songs from new comers while video games allows for some more complex
revenue model.
New product entry can be found to related to strategic interaction among others. The entry timing
decision and order of entry has it impact in new product performance. The competitive
environment in the product target market at it launch will impact the release date.
Methodologiesofentry for games:
There are 2 separate methodologies that help to identify the competitors of newly released video
games:
First model of video game depends on the demand of product or characteristics of games that
determines both its own quality as well as the quality of existing game in the same niche based.
Second, game publisher has an incentive to avoid releasing game concurrent with strong
competitors. If the competitors will decrease opening week demand so the publisher will seek a
different release with few competitors.

4. Video Games Demand:
To identify the importance of niches, they estimated the demand for video games with special
attention on measure of product differentiation and attributes of currently popular game. If there
is a little price variation across video games.
Video Games Entry:
A game’s peak popularity is almost always the week it is released then the demand start falling
as the new game launched. The substitution away from any video game would be smaller. If the
substitute effects are larger enough so it could be profitable for a publisher to delay its release.
Conclusion:
The above analysis demonstrates that the importance of substitutability across games it also
suggests that substitution may be larger with in product niches and indicates which of the niche
dimension has more substitutability than others.
Strategic Timing of Entry
Evidence from Apple iPhone
Apple is the world largest more profitable company. In its most recent quarters, the company
sold more than 61 million iPhone after selling a staggering 74.5 million iPhones in the quarter
before that during peak holiday shopping season.
While the most successful product the company had one massive advantage when lending the
product, it was not first. As professor Scott Galloway explain that what apple has enjoyed is what
he called second mover advantage.
He continues that apple has been second at most stuff. They are not a true innovator in the
definition of the word. They were not the first into object-oriented computing the mouse. They
weren’t the first mp3 player, they weren’t the first mobile phone. But they look at something,
they improve upon it, they weight it, they come in and make it more user friendly.

5. Conclusion:
The optimal timing of entry is thus a function of several factors, including the margin of
advantage offered by the innovation, the state of enabling technologies and complements, the
state of customer expectations, the threat of competitive entry, whether the industry faces
increasing returns, and a firm’s resources. Firms that have fast-cycle development processes have
more options when it comes to timing. Not only does a fast-cycle developer have an advantage in
introducing innovations earlier, but it also can be its own fast follower by quickly introducing
refined versions of its own technology.