Product line strategies of new entrants in an established industry: evidence from the U.S. bicycle industry

• Published in: Strategic management journal Vol. 27; no. 10; pp. 959 - 979
• Main Author: Dowell, Glen
• Format: Journal Article
• Language: English
• Published: Chichester, UK John Wiley & Sons, Ltd 01.10.2006; John Wiley and Sons
• Subjects: bicycle industry; Bicycles; Business strategies; Business structures; Capital costs; Competition; Corporate strategies; Diversification; Incumbents; Industrial market; Industrial products; Industry; Management science; Market theory; product line breadth; product line overlap; Product lines; Product management; Production; survival; Survival strategy; U.S.A
• ISSN: 0143-2095; 1097-0266
• DOI: 10.1002/smj.552

A firm's product line breadth in a given market has both benefits and costs: these effects can be more clearly seen by examining not only the number of products a firm offers, but also the degree of complexity that the product line represents. The effects of breadth are particularly important for new entrants in a relatively mature industry and I examine the breadth--survival relation on new entrants in the bicycle industry in the period 1993-98. I find that firms offering a greater number of products, those with very simple and very complex product lines, and those whose product lines have a moderate degree of overlap with rivals have the highest survival rates.