All the Right Moves: How Entrepreneurial Firms Compete Effectively

In this article, we examine competitive moves by which fi rms achieve superior performance. In contrast to prior work that has focused on moves and the related competitive advantages of large fi rms, we draw attention to entrepreneurial fi rms. Based on 32 runs of a multi-round experiential simulation and in-depth participant interviews, we fi nd that entrepreneurial fi rms require competitive strategies that are different from those of a control group of comparable large fi rms. Entrepreneurial fi rms that stay below the radar in established markets and are quick to explore in new markets perform better. They succeed in established markets with a strategy that works around large fi rm competition but ultimately surprises them, and in new markets with a strategy that sets the standards of competition swiftly by continuously creating and destroying new strongholds ahead of large fi rms. Overall, successful entrepreneurs use a combination of selective, invisible, and asynchronous strategies that vary depending on whether the market is established or new. Our fi ndings contribute to literatures on evolutionary learning, exploration and exploitation, and competitive dynamics. Copyright © 2012 Strategic Management Society.