Entry Strategies for De-Alio Firms in the Digital Music Player Industry

Abstract

Academics have discussed the dynamics between new entrants and incumbents and the complementary assets needed to commercialize a technology. This paper discusses the special situation of de-alio entrants, built on the synthetic framework proposed by Gans-Stern (2003) and He et al. (2006). In He et al. (2006), it is argued that de-alio entrants can leverage on existing complementary assets to enter along a new technology trajectory and then develop the intellectual property later on. We question whether this is the only entry behavior for de-alio entrants. We have investigated the digital audio player industry, adopting the complementary assets perspective. We illustrate the entry strategies adopted: leveraging on existing complementary assets first then building up intellectual property or vice-versa. We propose that the entry path followed by de-alio entrants, as suggested by He et al., can be bi-directional contingent on whether the complementary assets they hold are generic or specialized.