Product proliferation as barriers to entry: A longitudinal study in the food manufacturing industry

In spite of the widespread use of product proliferation by managers and the importance of barriers to entry for firm performance, only a few studies have examined barriers to entry arising out of product proliferation. In this dissertation, I argue that research on product proliferation leading to barriers to entry remains fragmented, and there is a need to build an integrated model that draws on the literature streams in strategic management, industrial organization economics, organization ecology, and marketing. The purpose of this dissertation is to provide such a model. More specifically, I propose a curvilinear relationship between product proliferation and barriers to entry that begins negatively but eventually becomes positive with increasing product proliferation. However, I expect reputation linkages in an industry, a new construct introduced in this paper, to moderate this curvilinear relationship positively. Furthermore, I propose that barriers need not be experienced uniformly by all entrants. Here, I examine brand-extension strategies pursued by entrant firms to overcome the barriers created by product proliferation. I test my hypotheses using longitudinal data from nearly 350 food product categories. The strategy of product proliferation seems to be more common in practice than in strategic management theory. This dissertation has taken the first step towards its proliferation among strategy researchers.