Please use this identifier to cite or link to this item: http://hdl.handle.net/10397/19827
Title: Internet channel entry : retail coverage and entry cost advantage
Authors: Cheng, Z 
Nault, BR
Keywords: B2C electronic commerce
Cost advantage
Market entry
Preemption incentive
Retail pricing
Stand-alone incentive
Timing game
Issue Date: 2007
Publisher: Springer
Source: Information technology and management, 2007, v. 8, no. 2, p. 111-132 How to cite?
Journal: Information technology and management 
Abstract: In this research we study how existing market coverage affects the outcome of the Internet channel entry game between an existing retailer and a new entrant. A market is not covered when some consumers with low reservation prices are priced out by existing retailers and do not purchase. In a model with multiple existing retailers and a potential new entrant, we demonstrate that when entry costs are equal, one of the existing retailers enters the Internet channel first. However, if the market is covered by existing retailers before entry, then because of the threat of Internet channel entry by the potential new entrant, retailer entry cannibalizes existing retail profits - cannibalizing at a loss. In addition, if a potential new entrant has a slight advantage in Internet channel entry costs and the market is not covered by existing retailers, then the new entrant enters the Internet channel first. If the market is covered by existing retailers, then the new entrant must have a larger Internet channel entry cost advantage to be first to enter the Internet channel.
URI: http://hdl.handle.net/10397/19827
ISSN: 1385-951X
EISSN: 1573-7667
DOI: 10.1007/s10799-007-0015-9
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