Microsoft, a landmark case of antitrust intervention in network industries. This paper analyzes the law and economics of United States v. Our findings highlight that it is crucial to study what firms do after they enter a new industry in order to more completely understand their ultimate performance. We explain this finding in terms of the firms' product technology strategies (i.e., offering products based on the technology standard and products incorporating the latest technology), pre-entry experience, and entry timing. But, we find the reverse for later entrants: startups that enter later in the industry have a survival advantage over the later entering diversifying entrants. What product technology strategies increase the survival chances of entrants into new, technologically dynamic industries? Does the effectiveness of these strategies differ by pre-entry experience? Does the effectiveness of these strategies differ by when firms enter a new industry? Consistent with the published literature, we find that diversifying entrants have an initial survival advantage over entrepreneurial startups. Studying the US personal computer industry from its inception in 1974 through 1994, we address the following questions. Importantly, our research is very revealing over the existing literature-the effects of pre-entry experience on firm survival disappear when controls for product strategy are included in the analysis.
We explain this finding in terms of the firms' product strategies, pre-entry experience, and entry timing.
What product strategies increase the survival chances of entrants into new, technologically dynamic industries? Does the effectiveness of these product strategies differ by pre-entry experience? Does the effectiveness of these product strategies differ by when firms enter a new industry? Consistent with the published literature, we find that diversifying entrants have an initial survival advantage over entrepreneurial startups.
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