Early entry, capabilities and shakeout in the US brewing industry

Abstract

Purpose – The purpose of this study is to examine how early-entry and process-based capability development affected firm survival during shakeout in the US brewing industry between 1938 and 1980. Design/methodology/approach – Hazard analysis was conducted on US brewing industry data spanning 42 years from 1938 to 1980. Findings – Both early-entry and later capability developments enhance the probability of survival. In addition, firms which entered early were also more likely to be the firms who continually developed capabilities across the decades. Research limitations/implications – This study contributes to our understanding of shakeout in traditional, non-high-technology businesses. However, because it is a single industry study, the ability to the generalize findings to other industry contexts is limited. Practical implications – Early entry can determine survival in industries with stable products and low levels of technological change. Social implications – Policy-makers interested in competitive dynamics should take note of the historical conditions that lead to industry consolidation in traditional industries, which, while not as glamorous as the technology sector, provide the core of US industry. Originality/value – Historical firm characteristics can impact industry structure and firm survival for over a century.