...Unit 3 Individual Project Dana J. Walker Strategic Management October 13, 2013 American Intercontinental University Abstract The following paper will be a comparison of the advantages and disadvantages of the first mover theory and the last mover theory. It will show examples of real firms that have been either successful or a failure as they have employed one of the theories at their company. In my conclusion I will give my recommendation on which theory I think should be used and I will support that with not only details but also an example of a company that I feel validates my claim. The first mover theory can be summed up as “being the first in a new market allowing for an advantage over ones potential rivals” (First-Mover Advantage,” 2013). Doing this will allow for both advantages and also disadvantages to the business that adopts this mind set and then proceeds on that course of action. First Mover Advantages: * Ability to capture market share majority – This is important because “the market’s perception of the product or service is driven by your market share and that determines you prerequisite for growth” (“Why is Large Market Share,” 2008). * Ability to become the low cost leader – Doing this means the firm can minimize your cost to pass the savings on to the customers. This builds customer loyalty to you brand or service. * Create and protect intellectual property – The creation and protection of intellectual property allows the firm to...
Words: 1139 - Pages: 5
...Zahiroon Ali-Marsh American Intercontinental University Unit 3 Individual Project MGT680 – Strategic Management Project Type – Unit 3 Individual project 05/04/2014 Abstract This paper will introduce the theories of 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...
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
...The first movers’ theory in business states that being first in a market brings rewards. It also states that he who moves first finishes last, but these are just theories. The concept is simple and to the point “by being the first to enter a new market, the business gains an advantage over the actual and potential rivals” (First Mover Advantage, 2012). The chart below gives advantages and disadvantages for being the first mover to being the late mover. Advantages of 1st Mover: By being first to enter the market, the business gains an advantage over its actual and potential rivals* Can capture market shares easily without worrying about rivals capturing the same customers The first mover will have established familiar products, brand loyalty, and the best retail outlets By beating rivals into the market, the first-mover can consolidate its position and compete more effectively continuing to expand Advantages of Late Mover: Have strong resources and capabilities could overtake the first mover. Free ride on a pioneering firms investments in a number of areas. By the time the late mover enters the market, the technological and market uncertainty has been resolved giving them an advantage. Late movers have the advantage of seeing what methods work after reviewing the 1st movers methods Disadvantages of 1st Mover: Can be less profitable than late movers because of high costs that overwhelm the sales gains Higher premiums accrues to pioneers, which is directly...
Words: 765 - Pages: 4
...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...
Words: 1385 - Pages: 6
...In the perfectly competitive market, firms cannot sustain the long-term profitability as the entrance of potential competitors can drive down the price to the point where economic profits are zero. But in reality, some firms persistently enjoy profits 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...
Words: 1164 - Pages: 5
...International Trade Theory Chapter Outline OPENING CASE: The Ecuadorian Rose Industry INTRODUCTION AN OVERVIEW OF TRADE THEORY The Benefits of Trade The Pattern of International Trade Trade Theory and Government Policy MERCANTILISM Country Focus: Is China a Neo-Mercantilist Nation? ABSOLUTE ADVANTAGE COMPARATIVE ADVANTAGE The Gains from Trade Qualifications and Assumptions Extensions of the Ricardian Model Country Focus: Moving U.S. White Collar Jobs Offshore HECKSCHER-OHLIN THEORY The Leontief Paradox THE PRODUCT LIFE CYCLE THEORY Evaluating the Product Life Cycle Theory NEW TRADE THEORY Increasing Product Variety and Reducing Costs Economies of Scale, First Mover Advantages and the Pattern of Trade Implications of New Trade Theory NATIONAL COMPETITIVE ADVANTAGE: PORTER’S DIAMOND Factor Endowments Demand Conditions Related and Supporting Industries Firm Strategy, Structure, Rivalry Evaluating Porter’s Theory Management Focus: The Rise of Finland’s Nokia FOCUS ON MANAGERIAL IMPLICATIONS Location First-Mover Advantages Government Policy SUMMARY CRITICAL THINKING AND DISCUSSION QUESTIONS CLOSING CASE: Trade in Information Technology and U.S. Economic Growth Learning Objectives 1. Understand why nations trade with each other. 2. Be familiar with the...
Words: 8280 - Pages: 34
...December 2013 The Existence of God: Theories of Thomas Aquinas and St. Anselm Everyone has a fundamental idea of God that they have thought of believing it or not believing it. Throughout history many theologians have tried to conjure up ideas and theories to prove the existence of God. In this essay I will explain two different philosophers ontological approach to proving the existence of God, and how their theories relate and compare to one another. The first philosopher St. Thomas Aquinas explains the existence of God in five different proofs. The first argument he attempts to prove the existence of God through, is the "unmoved mover" argument. He claims that since there is motion in the world, and motion has to be caused by another thing, which has to be caused by another thing, leads to the original mover, God who caused the first motion. The argument can be broken down like this: 1. Nothing can move itself. 2. If every object in motion had a mover, then the first object in motion needed a mover. 3. Movement cannot go on for infinity. 4. This first mover is the Unmoved Mover, called God. Aquinas motion includes any kind of change or growth. Aquinas argues that things that are at rest is the natural condition for them. Something that is moving is unnatural and must have been put into that state of motion by some external force.(Higgins) In the second argument for the existence of God, Aquinas bases it on the theory of Causation. He claims that since we know...
Words: 1493 - Pages: 6
...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
...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
...Master Thesis, 20 credits “Can strategic analysis through a market and resource based view prevent the founding of companies with an unsustainable business strategy?” Abstract The Resource-based and Market-based views (RBV and MBV) are two theoretical frameworks which try to find an optimal structure for business strategy by focusing on key strategic points to gain the maximum output or return. During the peak and later upheaval of what is often called the “dot.com bubble” – business models, valuations and strategies were questioned with regards to their anchorage to reality and building endurable businesses. Based on a wide investigation of literature and reports within the Resource-based and Market-based view combined with first-hand interviews and second hand research, we have tried to find to what extent these strategies could or would have prevented investments in IT-ventures lacking the prerequisites for long term competitive advantage. The initial indications and rationale was that the information and frameworks would provide a structured strategic analysis that, if correctly used, could have prevented the poor investments and even lessened the impact of the crash. However, our conclusions are that a strategic analysis, using the MBV and RBV frameworks, would not have been able to give a correct strategic recommendation since the analysis would have been largely based on incorrect assumptions. Furthermore the analysis would not in an efficient way make...
Words: 29865 - Pages: 120
...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...
Words: 11328 - Pages: 46
...Entravision slowly but surely fell behind in the ever more digitalized broadcasting market. Having found a market niche in the Hispanic market segment, Entravision set out to create a new Data analytics department called Luminar to utilize and profit from information gathered about the Hispanic core customership. The first segment argues whether and how Luminar is able to create value by implementing Big Data analysis. Consequently, this paper tries to clarify whether the obtained advantage can indeed be of a sustainable nature and thus allow for an independent and successful department within the Entravision construct. Furthermore, the data gathering capabilities are being analyzed to inquire into whether there is viable competitive power to benefit from the advantages mentioned priorly. Finally, having established the background for the undertaking, the paper will shed a light on how exactly the department would fit into the organizational structure and what benefits and pitfalls the embedment or independent venturing of Luminar would have. 2. Value Creation In order to asses the added value of Luminar to the mother enterprise Entravision this paper will provide a first outlook of the Latino segment in the US and then conclude with the Big Data analytics aspect, which comprises additional organizational and strategic issues. Latinos are the largest and fastest-growing minority group in the United States. The Latino population is forecasted to expand to 85 million by 2030, which...
Words: 2930 - Pages: 12
...strategies. It focuses on Wal-Mart's entry and expansion strategies into the Emerging Markets of Latin America, and discusses the different entry and expansion decisions being made by the company. Furthermore, the research critically evaluates the dynamic challenges facing developed country firms in their market entry and expansion strategies in emerging markets. Its contribution to the existing literature is its focus on the dynamics of entry modes in emerging markets. The research, based on an inductive approach, has been conducted as a case study by the use of secondary data. Wal-Mart began its internationalization by entering the two geographically nearest markets, namely Mexico and Canada. The entry into Mexico, which occurred 1991, was the first strategic move aiming at reaching the company’s overall goal of becoming the leading player in Latin America. Mexico together with Brazil are the two main emerging markets of Latin America characterized by a high growth potential on one hand, but a risky economic and political environment on the other. However, in the 1990s the economic and political environment became more stabilized, leading to an increased targeting by developed country retailers such as Wal-Mart. Due to the cultural differences, different consumer preference and only recently stabilized economic and political...
Words: 7645 - Pages: 31
...policies: c. Economic growth: investment and innovation d. Effect on competitiveness v. International Trade and the environment vi. Effects of Trade on the environment vii. Trade due to differences in Environmental Policies: e. Pollution Haven case viii. Trade not due to differences in Environmental policies: f. Comparative advantage and environment: how factor endowments can influence environment ix. Conclusion x. References xi. Abstract i.Economic growth and the environment In the first half of the twentieth century there was and incredible explosion of international trade: indeed international trade almost triplicate its size.( According to data from www.worldbank.org) A lot of changes contributed to this expansion, first of all technological changes that allowed to reduce distances between countries, the most significant example was the information and communication technologies that grew...
Words: 6832 - Pages: 28