What Makes Industries Attractive?
Industries very in their attractiveness and the prospects for entry over time, and the choice of when and how to enter turns out to be critical. Industries can be conceived as a set of niches defined by technologies and consumers, and these niches in turn create “peer groups” of organizations that attend to each other’s action for cues as to prices, quantities, and quality (White, 1981). One way to locate niches within industries is through technological overlap; for example, firms with patents on the same kinds of technologies, and whose patents cite the same kinds of other patents, are likely to be competitors in the same niche (Podolny, Stuart, and Hannan, 1996)