Shigeru Asaba (Faculty of Economics, Gakushuin University) and Marvin Lieberman* (Policy Group, UCLA Anderson School)
“Who Imitates Whom? A Study on New Product Introductions in the Japanese Soft-drink Industry”
Imitation is observed in various contexts in the business world and numerous theories on imitation have been proposed. Incumbent theories on imitation are organized into two broad categories: information-based theories and rivalry-based theories. Information-based theories propose that firms follow others that are perceived as having superior information. Rivalry-based theories propose that firms imitate others to maintain competitive parity or limit rivalry. This study tries to distinguish among the theories by examining when and what kinds of firms are more likely to be followed by others in their new product introductions in the Japanese soft-drink industry. The empirical analysis shows that in brand-new product imitation, firms follow large competitors, while in product proliferation within established product categories, firms do not tend to follow large firms but mimic others of similar size. These contrasting results are reasonable, suggesting that two theories on imitation coexist and environmental uncertainty may be one of key distinguishing characteristics. In the case of brand-new products, firms face much uncertainty. To deal with this uncertainty, firms tend to follow the most informative firms and information-based motives for imitation are dominant. In the case of product proliferation within an established product category, however, a firm is certain that the category exists. Rather, the firm might be afraid that new product introductions by rivals of similar size could damage the firm’s position within the category. In such an environment where uncertainty is comparatively moderate, rivalry-based motives for imitation are dominant.