The effect of organizational learning on market entry strategy

This dissertation examines the linkages between organizational learning and a firm's market-entry strategy. Different strategies for organizational learning yield different combinative capabilities, where combinative capabilities refer to types of technological knowledge coupled with forms of product-market experience. Combinative capabilities are thought to affect the likelihood of different types of innovation being generated as well as a firm's subsequent choice of a strategy for market entry.; This dissertation addresses this research question: How and when does organizational learning affect the market-entry strategic decision? This study seeks to contribute to management and marketing theory in five major ways. First, it describes and tests the overall process of how and when organizational learning affects firm strategic decision-making. Second, it identifies different strategies for organizational learning and explains how they arise. Third, it describes the process by which combinative capabilities, resulting from organizational learning, affect the likelihood of firm innovation types that, in turn, strongly influence the likelihood of the market-entry strategy chosen. Fourth, it provides a typology that distinguishes market-entry strategies by the relative novelty of markets and technology, and advances previous typologies developed in the management and marketing literature. Fifth, this market-entry typology takes a coevolutionary view of strategic decision making by connecting internal environmental forces embodied in firm organizational learning and innovation with external environmental forces embodied in market creation and development.; This dissertation's hypotheses are tested using a model incorporating both choice and timing. The studied population contains firms participating in the computer internetworking market from the time of the market's inception in 1969 to 2004. Three hypotheses pertaining to the choice of different market-entry strategies are tested using 2,237 observations of 214 firms spanning 36 years. One hypothesis involving product development (existing market/existing technology) market entry is fully supported. A second hypothesis involving low-end market disruption or revolution (existing market/new technology) market entry obtains mixed support. A third hypothesis of new-market disruption or speculation (new market/new technology) entry is partially refuted. Thus, partial support is obtained for firm combinative capabilities under dynamic market conditions. Implications for future research include opportunities to improve the study population, research design and measurements.