Commentary on ‘entry into new market segments in mature industries: endogenous and exogenous segmentation in the U.S. brewing industry’ by A. Swaminathan

✍ Scribed by Will Mitchell

• Publisher: John Wiley and Sons
• Year: 1998
• Tongue: English
• Weight: 40 KB
• Volume: 19
• Category: Article
• ISSN: 0143-2095
• DOI: 10.1002/(sici)1097-0266(199804)19:4<405::aid-smj986>3.0.co;2-7

✦ Synopsis

Swaminathan's paper, 'Entry into new market segments in mature industries: Endogenous and exogenous segmentation in the U.S. brewing industry', offers three contributions. First, the focal purpose of the paper is to test competing ecological predictions about how new industry segments arise. Second, the implications of the conceptual argument and empirical analysis help us understand how the interplay between exogenous environmental change, endogenous industrial change, and firm capabilities shapes industry evolution. Third, the study provides an example of how to reach generalizable conclusions about the effects of idiosyncratic firm capabilities. The first contribution provides a useful bridge between organizational ecology theory and strategy research, while the second and third contributions are fundamentally important in shaping our understanding of business strategy and our approaches to strategy research.

The primary focus of the paper is to compare niche formation and resource partitioning, which are two ecological theories about industry segmentation, as alternative predictors of entry rates to new industry segments in mature industries. Niche formation theory emphasizes exogenous changes such as new consumer preferences, regulatory regimes, and technology as the drivers of segmentation. In the niche formation view, the size of a new exogenously created segment