...ABSTRACT This report examines the issue on first mover in the perspective of study on supporting issue and non-supporting issue. This perspective can be discussion in terms of first mover advantages and disadvantages. While this study replicates some previous research on the issue, it also builds on the previous research by developing new theoretical arguments and adopting different research method. This reports shows that there are many different perspective on how first mover contributes to its advantages and disadvantages to a firms. In this paper, we categorize mechanisms that confer advantages and disadvantages on first-mover firms. Our aim is to begin to provide a more detailed research on the issues and to serve as a guide for future research. INTRODUCTION TO THE ISSUE The aim of this paper is also to present issues of importance for practitioners, including furthering our understanding of this issue in developing markets. As the growth of markets in developed countries has been slowing down, multi-national enterprises (MNEs) in developed countries are becoming more and more dependent on the growth of developing markets. With regard to the issue of first mover, what are the advantages and disadvantages of first mover strategy in a firm? It would be helpful for practitioners to have more knowledge of this issue. In recent years of strategic management scholars have expressed enormous interest in the resource based view of the firm. A previous winner of the SMJ best...
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...and constraints that determine the strategies that would result in above average returns. 2. Firms competing within an industry or a certain segment of that industry are assumed to control similar strategically relevant resources and to pursue similar strategies in light of those resources. 3. Resources used to implement strategies are assumed to be highly mobile across firms, so that any resource differences that might develop between firms will be short-lived. 4. Organizational decision-makers are assumed to be rational and committed to acting in the firm’s best interests, as shown by their 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...
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...pdfFor lots of in-depth examples | Flat World E-Text Read Chapter 1 Print These Pages from the WGU E-Reserves Library * Four Eras in the History of Marketing (Contemporary Marketing, pg. 8-11) * Avoiding Marketing Myopia (Contemporary Marketing, pg. 13) * Table 1.2 Avoiding Marketing Myopia (Contemporary Marketing, pg. 13) * Elements of Relationship Marketing (Contemporary Marketing, pg. 312 Review these Websites: 1. Marketing: Historical Perspectives (http://www.enotes.com/business-finance-encyclopedia/marketing-historical-perspectives) 2. Marketing Myopia (http://coolrulespronto.wordpress.com/2008/12/17/marketing-myopia/) Answer These Questions Thoroughly 1. What are the four components of the marketing mix? 2. What kinds of decisions does Product strategy include? 3. What kinds of decisions does Price strategy include? 4. What kinds of decisions does Place strategy include? 5. What kinds of decisions does Promotion strategy include? 6. Describe each of the four eras (or orientations) in the history of marketing: 1) production era, 2) sales era, 3) marketing era, 4) relationship era. 7. What company attitude characterizes each of the eras? 8. What is marketing myopia? Provide three examples. Flat World Readings: Chapter 2 Print These Pages from the WGU E-Reserves * Environmental Scanning (Contemporary Marketing, pg. 61) * Technological Environment (Contemporary Marketing, pg. 75) * Table 3.1 Elements...
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...THE FIRST MOVER Kelly Holm American InterContinental University Professor Bennett MGT 680 -1303D-01 Abstract The first mover theory implies that the first organization to enter the market has the upper hand in that market. There are advantages and also disadvantages to any theory. We will discuss in this paper some advantages as well as disadvantages of this theory. The First Mover Theory The First Mover Theory implies that the first company to enter a new market gains them superior brand recognition as well as customer loyalty. This is a form of competitive advantage for organizations to gain. There are however, pros and cons to being the first mover and the late mover. Late Mover Advantages Entering the market as a late mover gives the organization the opportunity to step into a market that has already been tested. It has been established and researched by the first mover. Consumers are familiar with the product and the marketing and developing has also been tested to determine the demand and response in the market. The uncertainty is removed from the market by the first mover. There is low risk for the later mover in predicting and how to adept to the market changes. For example, they have the ability to see what methods work without putting up risky investment capital and making bad business decisions. Essentially they have a lower risk in investment. Late movers have the opportunity to piggyback onto the first mover’s investment and improve on the product...
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...Whoever is first in the field and awaits the coming of the enemy, will be fresh for the fight; whoever is second in the field and has to hasten to battle will arrive exhausted. - Sun Tzu * Interpretation as it Pertained to Ancient Military Strategy In the Art of War, Sun Tzu begins his chapter Weak Points and Strong with this quote, and elaborates with: “Therefore the clever combatant imposes his will on the enemy, but does not allow the enemy’s will to be imposed on him. By holding out advantages to him, he can cause the enemy to approach of his own accord; or, by inflicting damage, he can make it impossible for the enemy to draw near. In ancient times, military movements were made by foot or horse and were excruciatingly slow, exhausting, and logistically intensive. Therefore, an army that arrived at the battlefield first had time to settle (rest), survey the surrounding area, and pick a strategic position. As the enemy army approached, the army that was established beforehand could choose to harass the enemy as they arrived or simply hold their advantageous position. When the enemy army finally arrived at the field, they would be at a disadvantage – exhausted from marching and attacking a fortified enemy. An effective general in ancient times either fought on his own terms or did not fight at all. This applies to modern day business managers as well. * Interpretation as it Relates to Modern Business Strategy First Mover Advantage In business, being...
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...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...
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...slow-cycle, fast-cycle and standard-cycle markets. CHAPTER OUTLINE Opening Case Competition Between Hewlett-Packard and Dell: The Battle Rages On A MODEL OF COMPETITIVE RIVALRY COMPETITOR ANALYSIS Market Commonality Resource Similarity DRIVERS OF COMPETITIVE ACTIONS AND RESPONSES Strategic Focus Who Will Win the Competitive Battles Between Netflix and Blockbuster? COMPETITIVE RIVALRY Strategic and Tactical Actions Strategic Focus Using Aggressive Pricing as a Tactical Action at Wal-Mart LIKELIHOOD OF ATTACK First-Mover Incentives Organizational Size Quality LIKELIHOOD OF RESPONSE Type of Competitive Action Actor’s Reputation Dependence on the Market Popped the Top? COMPETITIVE DYNAMICS Slow-Cycle Markets Fast-Cycle Markets Standard-Cycle Markets SUMMARY REVIEW QUESTIONS EXPERIENTIAL EXERCISES NOTES LECTURE NOTES Chapter Introduction: The competitive landscape of the twenty-first century will be characterized by increasing globalization, advanced technological development, and other factors that will lead to an environment that is more dynamic and charged with rivalry. Firms will act and react in a dance of sorts, but one involving very high stakes—even survival. This chapter introduces terms and concepts...
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...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...
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...market pioneering and later entrant strategy are outlined to lead to superior product performance. This literature review analyzes which strategy leads to superior product performance under which circumstances. Therefore, a conceptual framework is developed which illustrates the complex relationships of the integrated parameters. A detailed literature review is conducted to analyze theoretical as well as empirical approaches of strategy superiority. A holistic framework is introduced which depicts the superiority of a market strategy under given circumstances. Results suggest that being a pioneer or later entrant is not only a strategic decision on the company’s side but depends on various factors. The superiority of a market entry strategy needs to be evaluated individually for a new product. Finally, recommendations for future research are given. 1. Introduction Nokia’s communicator phones were the first smartphones on the market, including all essential characteristics: online access, navigation as well as apps to facilitate usage. However, being first on the market does not lead to a long-term success of Nokia smartphones. In 2007 Nokia had a market share of 49.4 % of the worldwide smartphone market, in 2012 the market share only adds up to 4.9 %. In April 2014, Nokia’s devices and services business was acquired by Microsoft. However, there are also first mover on the market who are still very profitable. Procter, Gamble was the first company who launched diapers and is...
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...only between San Fransisco, California, and Honolulu, Hawaii. DHL was founded by three young shipping executives; Adrian Dalsey, Larry Hillblom, and Robert Lynn who were casting about for a way to increase turnaround speed for ships at ports. On 25 September 1969 they incorporate DHL. In 1998, Deutsche Post began to acquire shares in DHL. It finally reached majority in 2001 and completed the purchase in 2002. Finally, by 2003 this company status is under the business group of Deutsche Post World Net (DPWN) Germany. Deutsche Post then effectively absorbed DHL into its Express division, business units and subsidiaries. Currently they delivering to over 70,000 destinations in 227 countries with 6,500 offices around the world, the company had over 150,000 employees globally. Belgium-based DHL International (DHL), in collaboration with its Chinese partner; Sinotrans which was also known as the China National Foreign Trade Transportation (Group) Corporation, launched an international express service, in China. Its core business was transporting documents and packages, which was a door-to-door delivery service particularly targeting parcels and freight items. The service offered shorter delivery and pick-up times, besides providing better customer service and shipment visibility via DHL‟s “Track-and- Trace” technology. DHL also offered some other services like e-commerce and logistics solutions for industries like automotive and life sciences. With its innovative and customized solutions...
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...markets. In the article “Blue Ocean or Fast Second Innovation? A Four Breakthrough Model to Explain Successful Market Domination”, Buisson and Siberzahn (2010) highlight how the theories of the first mover and fast second are recognized as the primary approaches to achieving innovation and domination in the market space. Buisson and Siberzahn (2010), insist that neither of these two theories can fully account for market domination and offer research and a comprehensive literature review that to suggest and explain the assertion that market domination is achieved by using four types of breakthroughs either concurrently or separately. The intent of this paper is to describe and highlight the shortcomings of the first mover and fast second theories as described by Buisson and Siberzahn (2010). Summarize their views of the four breakthroughs, review the literature provided, examine the methodology, and report the key findings of their article. The Problem With The First Mover Approach According to Buisson and Siberzahn (2010), neither first mover nor fast second innovation models can fully explain market domination by a company. The first mover approach is one in which the company enters the market, creates and dominates the new area (Buisson, B. & Siberzahn, P. 2010). Buisson and Siberzahn (2010) note that the first mover approach is on top of mind of business leaders due to the introduction of Kim and Mauborgne’s Blue Ocean Strategy (2004). Theoretically, blue oceans represent...
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...Likelihood of attack: second mover become first mover This is a Multimarket Competition age. Netflix wants to win this battle, but they have to beat their competitors in several product or geographical markets. Although Netflix is not the first mover, they’ve learned from the mistakes from Blockbuster. Forecasting the market share, innovating new methods for customers is easy to use. What Netflix said is “Our business model went from dead, to streaming, but all the money is made on DVD, we’re actually delivering great content and people pay instead of going to Blockbuster”. When Netflix was founded in 1997, Blockbuster’s objective was to remain the world’s largest video rental chain, and operated more than 6,500 franchise stores in 17 countries. It is a slow-cycle market and the Blockbuster monopoly situation of the market ,and the other company supply the similar service, but the Netflix understands that the DVD rental industry is not so attractive because of its low barriers to enter into this industry and potential entrants to market range from the actual studio that it created and own the rights of content to illegal digital distributors. The most important problem is Intensive rivalry of competitors are too high, so Netflix has to do strategies for Instituting Change. They are not the first movers for DVD rental, but they are the first one of the online rental,In the late 1990s, with the booming in number of Internet users,Reed Hastings knows invest in Internet to get...
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...Strategy Formulation Rex C. Mitchell, Ph.D. INTRODUCTION It is useful to consider strategy formulation as part of a strategic management process that comprises three phases: diagnosis, formulation, and implementation. Strategic management is an ongoing process to develop and revise future-oriented strategies that allow an organization to achieve its objectives, considering its capabilities, constraints, and the environment in which it operates. Diagnosis includes: (a) performing a situation analysis (analysis of the internal environment of the organization), including identification and evaluation of current mission, strategic objectives, strategies, and results, plus major strengths and weaknesses; (b) analyzing the organization's external environment, including major opportunities and threats; and (c) identifying the major critical issues, which are a small set, typically two to five, of major problems, threats, weaknesses, and/or opportunities that require particularly high priority attention by management. Formulation, the second phase in the strategic management process, produces a clear set of recommendations, with supporting justification, that revise as necessary the mission and objectives of the organization, and supply the strategies for accomplishing them. In formulation, we are trying to modify the current objectives and strategies in ways to make the organization more successful. This includes trying to create "sustainable" competitive advantages...
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...that are higher than its rivals. Resource-based theory (RBV) is used to explain this phenomenon by stating that ‘the unique bundle of resources that some firms have obtained help to shape the firms’ value-creating strategies which are implemented to gain a competitive advantage’. This essay will firstly examine the characteristics of the resources which are the basis of a competitive advantage, then analyze the isolation mechanism which help to maintain firms’ competitive advantage. Finally limitations of this theory will be discussed. According to McGahan and Porter’s research, 31.71% of the factor influencing business profitability is suggested to be firms’ resources and capabilities. These resources and capabilities have to be heterogeneous and imperfectly mobile because they can be inherently non-tradable, firm-specific, and co-specialized. Moreover, resources should fulfill VRIN criteria to enjoy a competitive advantage and sustainable performance. Firstly, resources must be valuable enabling a firm to exploit opportunities and neutralize threats by improving its efficiency and effectiveness. Secondly, resources must be difficult to find among the existing and potential competitors of the firm. Hence resources must be rare or unique to offer competitive advantages. Additionally, resources should be inimitable, which means other firms either cannot obtain them or have to obtain them at a much higher costs. Fourthly, key resources need to be non-substitutable. If not, competitors...
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...Strategy Formulation Rex C. Mitchell, Ph.D. INTRODUCTION It is useful to consider strategy formulation as part of a strategic management process that comprises three phases: diagnosis, formulation, and implementation. Strategic management is an ongoing process to develop and revise future-oriented strategies that allow an organization to achieve its objectives, considering its capabilities, constraints, and the environment in which it operates. Diagnosis includes: (a) performing a situation analysis (analysis of the internal environment of the organization), including identification and evaluation of current mission, strategic objectives, strategies, and results, plus major strengths and weaknesses; (b) analyzing the organization's external environment, including major opportunities and threats; and (c) identifying the major critical issues, which are a small set, typically two to five, of major problems, threats, weaknesses, and/or opportunities that require particularly high priority attention by management. Formulation, the second phase in the strategic management process, produces a clear set of recommendations, with supporting justification, that revise as necessary the mission and objectives of the organization, and supply the strategies for accomplishing them. In formulation, we are trying to modify the current objectives and strategies in ways to make the organization more successful. This includes trying to create "sustainable" competitive advantages...
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