Off the rivals’ radar in emerging market segments: Non-mutual rival recognition between new firms and incumbents

Hitoshi Mitsuhashi, Lailani L. Alcantara

Research output: Contribution to journalArticlepeer-review

1 Citation (Scopus)

Abstract

We examine the causes of non-mutual rival recognition—a situation in which new firms in emerging market segments recognize incumbents in pre-existing and potentially related market segments as rivals, but the incumbents do not recognize the new firms as rivals. Drawing upon the prototype theory, which makes use of cognitive representations or images in recognition processes, we argue that managers use rival prototypes in making sense of competitive environments. Specifically, we argue that non-mutual rival recognition occurs when new firms are not proximate to the incumbents' prototype of rivals because their organizational attributes, such as size and age, are highly distinct. It also occurs when it is difficult for incumbents, owing to their diversification into multiple product markets, or their strong identity as players in emerging market segments, to clearly assess new firms’ proximity to the prototype. Using the context of U.S. online retailers that went public between 1995 and 2001, we find support for our arguments.

Original languageEnglish
Article number101888
JournalLong Range Planning
Volume54
Issue number2
DOIs
Publication statusPublished - 2021 Apr

Keywords

  • Emerging market segments
  • Incumbents
  • New firms
  • Non-mutual rival recognition
  • Prototypes

ASJC Scopus subject areas

  • Geography, Planning and Development
  • Finance
  • Strategy and Management

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