This paper investigated whether firms distinguish between capabilities-based market entry and competitive/rivalry-based entry in entry decisions. In particular, we examine this question in the context of simultaneous entry games in the generic pharmaceutical industry in Taiwan. We find that, in agreement with previous organization literature as well as the research on generic entry, capabilities-based entry does take precedence over competitive pressures, but that this finding may be limited to industries characterized by simultaneous games. Although the
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industry features allow us to better compare capabilities-based entry and rivalry-based entry, the absence of coordination among markets as a result of the simultaneous game feature makes the AMC model from the competitive dynamics literature defective in our industry context. These findings indicate that future research on market entry should pay more heed to the entry game context and how this will affect incentives for entry. They also point to the need to integrate resource-based research and the emphasis on managerial assessment in decision-making from the AMC model.
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