Asymmetric preferences for leaders and implications for followers

Abstract

Purpose – This study aims to examine leader–follower interdependence from a different perspective to learn whether variations in the market leader (ML)’s level of market strength require followers to pursue different strategies Literature investigating this interdependence largely focuses on the market share consequences for the ML, considering the strategies that followers pursue. Design/methodology/approach – A consumer scanner data set containing 375 followers provided input for a regression model, aimed at explaining the market share performance of followers. Findings – The ML’s products and level of market strength influence whether a follower should be more similar to or different from it, as well as the performance outcomes of distinct product development strategies. Research limitations/implications – This analysis uses unique measures of market strength and product difference; both are significant, but their robustness is limited without further substantiation. Practical implications – Managers must consider three factors that influence the outcomes of their product development strategies: the ML’s products, its market strength and the sum of product attribute differences across their range. Originality/value – This study empirically validates several theoretical arguments for how an ML influences followers’ performance, including the existence of preference asymmetry toward the ML. In turn, it makes recommendations of optimal strategies that followers should pursue. Finally, this article details a method to measure overall differences and highlights the significance of this measure for explaining a follower’s performance.