...First – Mover Advantage: the Longevity of Pioneers Main questions to be addressed in the paper: 1. What are “first – mover advantages”? 2. What first – mover advantages make those who still dominate the market last long? 3. How do first movers who still dominate the market conquer first – mover disadvantages and challenges posed by second movers and late movers? 4. How do first movers dominating the market protect their longevity from in – house obstructions and uncontrollable<outside> obstacles? 5. How do they compete with second movers and late movers? 6. What are competitive advantages of first movers who dominate the market? 7. What’s the trend of the first movers towards dominating the market? Why are we interested in this issue? We just see that many pioneers were routed by second movers or late comers. There are not so many first movers who has been dominating the market since they pioneered. There are a number of causes that can drive first movers out of the market or overthrown by late movers. The survivors are interesting. We’d like to know how they do it and remain strong. We’d like to learn the strategies they. We also want to analyze the competition and the trend of the first movers. What to be included in the paper 1. General information about first movers: what are they? What do they do? Why are they called first movers? 2. First mover advantages 3. There are 3 types of first – movers: ones who still dominate the market, ones who were...
Words: 464 - Pages: 2
...market, and if it should have additional toppings sold separately or not. Objectives: Sustain the first-mover advantage Extend their product line Increase market share Alternatives: Maintain the status launch the Pizza Kit with toppings sold separately launch the Pizza Kit with no additional toppings sold separately Consequences of Alternatives: Recently, the company’s major competitor in the global markets ,Kraft is expected to launch refrigerated pizza in about six months .NRFC want to replicate the success of its earlier product to pizza market, NRFC has to launch its product well before Kraft to enjoy the first mover advantage over the competitor. The first option - Maintain the dominant status in pasta market, not entering the pizza market. The entry of pizza into the refrigerated food category was new as people never tried it. Because the Pizza market was dominated by restaurants where the people either ate it or carried for eating it at home. Therefore it will be more risky and costly for Nestle to enter the pizza market. Nestle could damage its current Contadina Pasta & Sauce product line if the Pizza Kit product is not received well in the marketplace due to the brand penetration. The second option- launch the Pizza Kit with toppings sold separately. NRFC gained the first-mover advantage when they enter the pasta market, and then use the advantage to sustain the threatened by Di Giorno. NRFC’S brand...
Words: 909 - Pages: 4
...CBL Case 4: Friendster/Facebook Which strategies should facebook follow in order to sustain the market leader position in the social network market in 3 years? 1. What is strategy formulation and what are strategy choices? Strategy formulation is the process of deciding on the most appropriate strategy to pursue in order to reach the organisation’s vision. After conducting a situational analysis you have a lot of information to process from which you can formulate possible strategies. The different paths to take are the strategy choices you can decide on (Management Study Guide, n.d.). Strategy formulation is the step before strategy implementation, in which the chosen strategy will be put into action. Carefully analysing the situation and formulating the strategy is important, since implementation follows right after and making a mistake in the formulation phase has essential consequences later on (Hill & Jones, 2015). 2. How to formulate strategies? (TOWS matrix) After completing the SWOT analysis you have an overview of internal strengths and weaknesses and external opportunities and threats. But having this information is not enough. In order to formulate a strategy you need to confront the finding and turn the SWOT table into a TOWS matrix. This TOWS matrix confronts all four elements with each other. Based on the confrontation different strategies can be retrieved. The maxi-maxi strategy makes use of strengths to exploit opportunities. The mini-maxi strategy advises...
Words: 1589 - Pages: 7
...of an entrepreneurial strategy are: 1. The generation of a new entry opportunity, the result of knowledge, and other resources into a bundle that will be valuable, rare, and difficult for others to imitate. 2. The exploitation of a new entry opportunity. 3. A feedback loop. E. If the new entry warrants exploitation, then firm performance depends on: 1. The entry strategy; the risk reduction strategy. 2. The way the firm is organized. 3. The competence of the entrepreneur and the management team. F. Long-run performance is dependent upon the ability to generate and exploit numerous new entries. II. GENERATION OF A NEW ENTRY OPPORTUNITY A. Resources as a Source of Competitive Advantage 1. Resources are the basic building blocks to a firm’s functioning and performance. These can be combined in different ways to achieve superior performance. 2. These resources need to be considered as a bundle rather than just the resources that make up the bundle. 3. A bundle of resources is: a. Valuable when it enables the firm to pursue opportunities, neutralize threats, and to offer products and services that are valued by customers. b. Rare when few or no competitors have it. c. Inimitable when replication of this combination of resources would be difficult and/or costly for competitors. 4....
Words: 3344 - Pages: 14
...a late-mover theory or a first-mover theory through the use of positives and negatives of each which will be supported by examples of sixteen companies. Finally, a decision will be made as to which style should be used and why. Introduction Within this paper the late mover theory and the first mover theory will be defined. Once they are both defined each one will be shown to have advantages as well as disadvantages. All of these advantages and disadvantages will be supported with real life situations and businesses that have used both for the positive as well as the negative. This analysis is being done because the head company wants to know which theory to go with in terms of releasing its new product. Unfortunately, the product is unknown as well as many other facets of the company. The benefit to that is the decision can be made with an unbiased approach and only the facts will hold true within this report. Advantages & Disadvantages of the Theories The “First-mover” theory and the “Late-mover” theory are both ways of attacking the global marketplace with regard to product placement as well as the best time to strike. Many corporations in the world will come up with similar or even identical ideas at the same time. The difference is whether to try and be the first to put it on the market or wait and see how the other company does and respond accordingly through “tweaking” the product or just not even making an attempt. First-mover Theory ...
Words: 2130 - Pages: 9
...vantage//~‘L~ FIRST-MOVER ADVANTAGES Marvin B. Lieberman David B. Montgomery’ October 1987 Research Paper No. 969 1The authors are, respectively, Assistant Professor of Business Policy, and Robert A. Magowan Professor of Marketing, at the Stanford Business School. We thank Piet Vanden Abeele, Rajiv Lal, Mark Satterthwaite and Birger Wernerfelt for helpfiul discussions on earlier drafts. The Strategic Management Program at Stanford Business School provided financial support. / ~‘N ~ Abstract This article surveys the theoretical and empirical literature on mechanisms that confer advantages and disadvantages on first-mover firms. Major conceptual issues are addressed, and recommendations are given for future research. Managerial implications are also considered. INTRODUCTION What, exactly, are first-mover advantages? Under what conditions do they arise, and by what specific mechanisms? Do first-movers make aboveaverage profits? And when is it in a firm’s interest to pursue first-mover opportunities, as opposed to allowing rivals to make the pioneering investments? In this paper we examine these and other related questions. We categorize the mechanisms that confer advantages and disadvantages on first-mover firms, and critically assess the relevant theoretical and empirical literature. The recent burgeoning of theoretical work in industrial economics provides a rich set of models that help make our understanding of first-mover advantages more precise. There...
Words: 12068 - Pages: 49
...the first mover and last mover movement in marketing. It will outline the advantages and disadvantages of each theory and examples of each and how it affects the use of the theory. It progresses with giving four examples of companies that that been successful and failed using the theories. It will conclude with an unbiased recommendation of which theory is more beneficial and effective to use. Advantages and Disadvantages of the First Mover Theory The value of being the first is a concept that is widely accepted by many cultures. In today’s business environment where there are limited resources and competition is fierce, it is understood that he who invents first or gives the customer what he wants first will emerge the winner. The determination to be the first and the understanding of the importance inspires the concept known as the first mover (Ya-De Wong, 2003). As the name implies, first movers are predicted to gain considerable advantages over their competition by acting early, as it is said the early bird gets the worm. Businesses that are in the network or electrical industry may have the ability to place barriers on other entrants into the market and can even make it impossible for the competition to follow. Being early may also allow a company to capture a large portion of the market share by being the only one of its kind on the market and also create brand loyalty and customer recognition. By the time the competition decides to follow, the first mover...
Words: 2270 - Pages: 10
...First mover vs. late mover theory Carzadean Lawton MGT-680 Strategic Management Dr. Leland Taylor July 14, 2013 Abstract There have been companies that have been successful at being the first to develop a new product and put it out before their competitors have a chance to copy. Some companies have proven that being the first is not always the best and the last sometimes has its perks but being last can also have its failures as well. In this report, we will analysis the advantages and disadvantages of both the first and late mover theory along with the pros and cons of the advantages and disadvantages. After the advantages and disadvantages are provided, an example of real firms who have been successful and those who have failed using each theory. Finally, a definitive and unbiased recommendation of which theory to use will be provided as well as specific attributes which constitute the most advantageous context in which the chosen theory operates. Introduction Companies today are very competitive when it comes to development of new products and putting them out in the limelight for consumer purchase. The number one question that should be asked before a company puts a product out in the market would be is following the first-mover theory an effective way to build new business or would creating a new version of the products with the later-mover theory be a better way to build a new business? First let’s define these specific theories. The first-mover theory is...
Words: 2108 - Pages: 9
... 1) Emerging market exists for ED pharmacies 2) First mover’s product is not superior enough, which provides chance for followers to defeat the first mover. PIC Guideline This should be a dual-driven new product development case. 1) Market driven, a great amount of male is suffering ED problems now. These problems need to be solved immediately, which means a great market there. 2) Technique driven, new physical technique can provide effective and safe oral treatment for ED, meanwhile minor side effects from immature pharmacies can be reduced by the new technology. New Product Category Levitra is a new-to-firm product 1) It is completely new for the company GlaxoSmithKline and Bayer 2) There is a first mover in the same market already when GlaxoSmithKline-Bayer began to launch Levitra. So, it is not so new-to-world product. 3) The concept sequence for this product should be N-T-F. There is market inquisition first, then GlaxoSmithKline develop the relative new techniques, and finally, new products are manufactured and introduced to market. Strategy selection This is a Market/Technique dual-strategy driven product Objectives 1) ED market is very big, profits and revenue should be considered by every company into this market 2) To achieve this target, company should get a certain position in the market, in other words, they should get a big market share. 3) But, the first mover has already been there. It is quite possible that customers...
Words: 1223 - Pages: 5
...First movers have significant advantages over their new entrant competitors. The first first-mover advantage is that Jeff was able to establish extreme customer loyalty and secure a significant portion of the market. Even though competitors such as Barnes and Noble and Borders tried to imitate Amazon, Amazon was able to expand its product offerings to retain a majority of the customers. Not only did it offer books, but it also became a one-stop shop for any wants, needs or desires. Another advantage of being a first mover is that Amazon can reduce buyer power (Porters 5 forces) by controlling the switching costs. Through rewards and discount programs such as free shipping, Amazon has made it expensive to switch to a competitor. Once a customer is enrolled in these rewards programs, the price difference is such that the customer will pay more to switch. Unfortunatley, there are many disadvantages that come with being a first-mover. Although you can retain a portion of the industry through brand loyalty, there are many customers who choose to wait until products or services have improved. These customers will also wait for competiting businesses to lower costs and are willing to wait out the bugs and problems that first movers often run into. By being a first-mover, it is easy for competitors to see what you are doing right, and where you need to improve. They can easily take this opportunity to create a better business building off of your idea. The learning curve was steep...
Words: 1045 - Pages: 5
...profit-maximizing behaviors. STEPS TAKEN IN THE I/O MODEL: 1. Study the external environment, specifically the industry environment. a. The external environment: general, industry, and competitor environment. 2. Locate an industry with high potential for above average returns. a. An attractive industry: an industry whose structural characteristics suggest above average returns. 3. Identify the strategy called for by the attractive industry to earn above average returns. a. Strategy formulation: selection of a strategy linked with above average returns in a particular industry. 4. Develop or acquire assets and skills needed to implement the strategy. a. Assets and skills: assets and skills required to implement a chosen strategy. 5. Use the firm’s strengths (developed/acquired assets/skills) to implement the strategy. a. Strategy Implementation: selection of strategic...
Words: 2981 - Pages: 12
...points) • We are going to discuss six cases (sessions no. 2, 3, 5, 6, 7, 9) • All groups have to read carefully all six cases and be prepared to give an oral presentation (ad-hoc, at least two times during our course) based on assigned questions (see the table below). • Group can earn up to 5 points for a presentation • Groups are fixed and preassigned (see the list) • Do not prepare any PowerPoint presentation, however, you may want to write up your answers in a form of short paper (1-2 pages) Take-home exam (10 points) Session Date Topics Readings 1 17.03.2016 Thursday Introduction • Globalisation • Competitive advantage of nations Additional readings: Davies, H. & Ellis, P., 2000. Porter’s competitive advantage of nations: time for the final judgement? Journal of management studies, 37(8), pp.1189–1214. Dunning, J.H., 1993. Internationalizing Porter’s diamond. MIR: Management International Review, pp.7–15. Porter, M., 1990. The competitive advantage of nations. Harvard Business Review, 68(2), pp.73–93. 2 31.03.2016 Thursday Global value chain • Outsourcing vs offshoring • Global value chain • offshoring • outsourcing • Resource-based view • Transaction costs • Intellectual property infringement Case: Ecco – Global value chain management 1. Describe the competitive environment of ECCO and determine how well ECCO is positioned (vis-a-vis the competitors) to take advantage of changes in the industry. 2. Analyze ECCO's global value chain...
Words: 1043 - Pages: 5
...FIRST-MOVER ADVANTAGES Marvin B. Lieberman David B. Montgomery’ October 1987 Research Paper No. 969 //~‘L~ 1The authors are, respectively, Assistant Professor of Business Policy, and Robert A. Magowan Professor of Marketing, at the Stanford Business School. We thank Piet Vanden Abeele, Rajiv Lal, Mark Satterthwaite and Birger Wernerfelt for helpfiul discussions on earlier drafts. The Strategic Management Program at Stanford Business School provided financial support. / ~‘N ~ Abstract This article surveys the theoretical and empirical literature on mechanisms that confer advantages and disadvantages on first-mover firms. Major conceptual issues are addressed, and recommendations are given for future research. Managerial implications are also considered. INTRODUCTION What, exactly, are first-mover advantages? Under what conditions do they arise, and by what specific mechanisms? Do first-movers make aboveaverage profits? And when is it in a firm’s interest to pursue first-mover opportunities, as opposed to allowing rivals to make the pioneering investments? In this paper we examine these and other related questions. We categorize the mechanisms that confer advantages and disadvantages on first-mover firms, and critically assess the relevant theoretical and empirical literature. The recent burgeoning of theoretical work in industrial economics provides a rich set of models that help make our understanding of first-mover advantages more precise. There is...
Words: 11961 - Pages: 48
...Serv Bus (2012) 6:265–278 DOI 10.1007/s11628-012-0135-0 EMPIRICAL ARTICLE Innovation and imitation effects in the mobile telecommunication service market Sang-Gun Lee • Byeonghwa Park • Si-Hyeon Kim Hong-Hee Lee • Received: 11 February 2011 / Accepted: 26 January 2012 / Published online: 15 May 2012 Ó Springer-Verlag 2012 Abstract This study investigates adoption patterns of the first mover and the followers in the Information and Communication Technology industry. The continuous behavior of adopters over time is difficult to analyze and most previous studies were cross-sectional rather than longitudinal. In order to overcome these limitations, a mathematical diffusion model with verified official time-series data is used to analytically investigate the impact of both innovation and imitation effects on the mobile phone adoption in South Korea. The results showed that the imitation effect of the first mover was larger than those of the followers in the mature mobile telecommunication services market in South Korea. The innovation effect of the follower was larger than that of the first mover, and the innovation effect was larger than the imitation effect in the market. Keywords Innovation effect Á Imitation effect Á Diffusion model Á Mobile telecommunication market S.-G. Lee Department of Business Administration, School of Business Administration, Sogang University, Shinsu-dong #1 Mapo-gu, Seoul 121-742, Korea e-mail: sglee1028@yahoo.com B. Park College of Business Administration...
Words: 6312 - Pages: 26
...About First Mover Advantage Innovation and uncertainty • Technological uncertainty • Uncertainty regarding the technological features of the product – Standards – Dominant design • Market/Demand uncertainty • Uncertainty regarding the size and growth rates of the markets for new products – Potential uses – Substitute products – Complementary products First Mover Advantage A first mover is a firm that takes an initial competitive action. Advantages of first movers If successful, the firm earns above-average returns until other competitors are able to respond effectively. Develop customer loyalty. Harley-Davidson has been able to maintain a competitive lead in large motorcycles due to intense customer loyalty. Disadvantages of first movers High risk High development costs High demand uncertainty First mover market entry • Advantages Above-average returns until other competitors respond effectively Start down the learning curve earlier Opportunity to gain customer loyalty Opportunity to set standards Disadvantages • Uncertainty about demand • High development costs • Risk of adopting a losing standard (Beta/VHS) • • • Forces Shaping Industry Competition Threat of new Entrants Bargaining power of Suppliers Rivalry among Existing Competitors Bargaining power of buyers Threat of substitute products Forces Defining Competition In Mini Steels Rivalry • Diversification in product lines, ex pipes • Move towards high quality bars, structural...
Words: 808 - Pages: 4
