...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...
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...Analysis of Amazon’s supply chain investment strategy When speaking about the largest retailers in the United States, one will always mention the two largest retail distributors, Walmart and Amazon. While the former company depends on its brick and mortar stores as the major contributor or their revenues, the latter focuses most of its attention on internet-based retailing. Amazon was founded by Jeff Bezos in 1994 due to his belief that he would regret not participating sooner in the internet business boom during the 1990’s. Bezos read a report about the future of internet which projected annual web commerce growth to be at 2,300%. At the beginning, the company was pioneered as an online bookstore due to the low price point of books and the huge number of titles available. The advantage Amazon had compared to other brick and mortar store was that an online bookstore could carry several more times the titles than a physical store, since there is an unlimited virtual warehouse. By 2000, the company had moved away from simply selling books, while expanding into an online marketing place selling many varieties of goods and services. Due to Amazon’s early entry into the online retail market, it had the first mover advantage to allow the company to “get big fast” and become one of the the most recognizable names on the internet. By the end of 2002, Amazon had 22.3 million registered users on the website which makes it one of the largest online retailing company at that time. However...
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...Natureview case Natureview is in front of a key decision. Let’s make a pro’s/con’s analysis of the three proposed options: Option 1: Introducing 8oz. product line in two sjpermarket regions: PRO - taking advantage of a trend - first-mover advantage - strong revenue potential - growing market for organic products esteemed 20% growth - new type of customer CON - explotion of costs, distribution, administrative, marketing - slotting expenses - insufficient ressources - time pressure - brand equity damaged Option 2: expand 32 oz. nationwide PRO - higher gross profit margin - high market share - lower marketing investment as being niche product - nationwide coverage - possible first step for further expanding actions in the future CON - high slotting expenses - large investment in human ressources (sales forcé) - investment in distribution logistic - investment in manufacturing increase - possible conflicto with cannel partners Option 3: introducing children’s multipack in natural foods cannel PRO - high gross profitability - low investment in additional marketing and sales - enforce current distribution lines - excellent positioning for the new product - higher growing rates of this cannel - no additional functional ressources needed - reinforce brand equity CON - insufficient potential revenues - dependence on one channel - “missing the right moment” - increasing competition Recommendations: I would...
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...INTRODUCTION TomTom (TOM2) is one of the largest producers of navigation systems in the world, comprised of both standalone devices and applications. The company leads the navigation systems market in Europe and is second in the US, but as these markets become saturated TOM2’s sales growth rate and profits decrease. Contributing to the decline, Google and Nokia offer free navigation features on GPS-enabled smartphones. Despite competition, TOM2 will increase in profitability due to innovation and their ability to take advantage of external opportunities. SWOT ANALYSIS Internal Strengths TOM2 has brand recognition. According to the company, three out of four people are aware of TomTom products. As TOM2 diversifies into new markets there lies a strength in brand loyalty, as consumers will prefer the products of this established company compared to lesser known competitors, allowing TOM2 to charge premium prices for their brand name. TOM2’s belief in radical innovation is one of their greatest strengths. TOM2 continually develops better routing and traffic information. TOM2 has the world’s largest historical data base of IQ routes and possesses unique real time traffic information updates which empowers drivers to reach their destination better informed. As a result, TOM2 has increased the utility customers gain from using their value-added services. TOM2 can raise prices to reflect this utility or hold prices to induce sales thereby expanding sales volume. Internal Weaknesses ...
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...acquiring Foam Creations, they actively opened more production stores in different parts of the world and currently have a capacity which is much larger than the demand expected. This helps them fulfill the orders which are generated very fast. Also, because of this, they have the capability to manage their supply more efficiently depending on the demand of the market. For example, if a particular type of product if very well received, they can ramp up the production of that particular product and supply it within six weeks. Thus, minimizing stockouts and over production wastes. b. Globalized Market Demand and First Mover Advantage: Immediately after Snyder took over as the CEO of Crocs, they aggresively expanded themselves into new territories and were a significant market player in the Asian and European markets. This has enabled them to get the advantage of the first mover and establish crucial relationships with the retailers and the consumers in those markets. This has substantially decreased the threat of new entrants and is a core strategic asset for Crocs. c. Raw Materials Used, Croslite: The raw materials which are used by Crocs in the manufacture of the shoes is croslite. This is cheaper than the traditional material used in making footwear which is leather. This also is odor free and is lighter and does not get spoilt by it is unsold for an year or so. This ability of Crocs to make a superior product from a cheaper material itself is one of the most important core competency...
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...Does Apollo Hospital Madras provide superior value to its customers, shareholders, and employees through a well designed service system – in other words is it a breakthrough service organization? Yes Apollo Madras provide superior value to its customers, share holders and employees.Apollo has well designed service system and it is a breakthrough organization. Apollo’s greatest strength is the first mover advantage. They were among the pioneers in setting up quality private hospitals in India. Since they were able to provide world class medical service at affordable rates, this became a value for customers. Government also helped them eventually by getting rid of many financial and regulatory obstacles. Liberalization of private sector was a boon. Apollo were good pay masters as far India was concerned and this enabled them to attract talent. Doctors who wanted to come back to their country of origin were more than happy to join Apollo. The hospital imported latest equipments and had a good success rate. By using sound marketing, they were able to build a brand name very quickly. The successful surgery of Vice-President of India was a major break through for them in brand building. India’s growing middle class were the target segment for Apollo Hospitals. The patients were ready to pay for quality treatment and this segment was growing at more than 8%. Also they had little or no competition in Chennai especially from the poorly managed Government hospitals. Apollo was started...
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...ETrust Trust is defined as the psychological status of willingness to depend on another person or organization. It is the single most important factor for confidence in secure information for the consumer; without trust, a business cannot profit from the consumer, and the consumer will be dissatisfied. ETrust defines what ordinary citizens both fear and desire: privacy and security. ETrust understands information needs of both consumers and businesses in key areas where consumers perceive the most risk in online transactions, which is the safety of their information. This makes the concept a valid and important one when it comes to the safety and security of all in every technological situation in which people share information. Computers have become very useful tools for communications, banking, shopping, entertainment, staying in touch with friends and family, and learning about any number of interesting topics. However, the internet has a dark side, and most people are completely unaware of the pitfalls which come with this relatively new and fascinating online world. Among the malicious intentions of those who would compromise a computer are those to gain access to personal data for identity theft, to use the computer to send spam or be used to attack other computers on the network, to use the computer to “hack” other computers as the act of juvenile mischief to wreak havoc. To help solve this security and privacy problem, online businesses have started to use information...
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...Abstract I inherited The Broadway Café coffee shop from my grandfather which is located in downtown Atlanta. It was first opened in 1952. Coffee shop specialized in different coffees, teas, homemade soups, sandwiches, salads and full service bakery. For many years it was a hotspot, but for last five years business is going down. Now it needs new and improved methods to be back in business market. My grandfather never used computer and everything was manual including ordering and employee payroll. He had terrific memory and he knew his all customers. All recipes for homemade soups and baked goods were in his memory. Business’s only marketing was word-of-mouth. To bring café into 21 century we needs new technology like computers for sale, customer database, website for online presence, providing wireless hotspot, customer relationship management for marketing and sale strategies to gain a competitive advantage. We need to install cash register, computer server with wireless access to meet customers’ expectations. Established in 1952, the Broadway Café starts out with a competitive advantage from an established menu and loyal customer base; however, in a business landscape where new competitors are arriving on the scene rapidly, the café also has much to benefit from upgrading its business practices with information systems. Knowledge management, customer relationship management, and business intelligence systems will help preserve the knowledge of older employees for future...
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...Paths to success There are different paths and many theories that are helpful to get success. This paper discusses different paths of success such as 10,000 hour rule, Tiger mom and Tim Ferriss. It also discusses the advantages and disadvantages of each success method. 10,000 Hour Rule: According to this rule, brain takes 10,000 hours to assimilate all that it needs to achieve true mastery. In views of Heshmat, (2011), the 10,000 hours rule translated into practicing 3 hours a day for 10 years, which is indeed a common training span for young people in sports. This rule suggested that success is the result of accumulative advantages. It is a function of persistence and willingness to work hard. It is because it is difficult to carry out any long-range plan and achievement of any difficult goal, unless people can make themselves persist at it. Advantage: The main advantage of 10,000 hour rule is that it leads to the perfection of people. It is because after spending 10,000 hours on a particular task, individuals build necessary skills and competencies that are necessary to do the job in a perfect way (Bell, 2010). Disadvantage: The main disadvantage of this theory is that it takes a long-term view of getting success. Concurrently, this rule also not describes the performance of a person, who spends less than 10,000 hours to a particular job (Martin, 2011). It also limits the growth of an individual, as he/she focus on a particular job for 10,000 hours...
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...product into the refrigerated foods 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...
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...Merck worried that this drug could cannibalize profits from the animal version of the drug through the creation of possible black markets in the affected countries. Percentage of research budget that Merck should invest in drugs that will produce a substandard return on investment As a company that produces drugs to cure diseases in both humans and animals, Merck operates in a complex dynamic that requires it to take decisions that may not lead to profitability. Further, its corporate philosophy always revolved around the fact that the company’s first priority was the safety of people and only then did profits follow. I, therefore, believe that Merck should invest a large amount ( ~80%) of its research budget even on drugs that will produce a substandard ROI, provided the drugs promise to fully cure diseases without harmful side effects and they are the first in the market to do so. This could help them build a strong brand equity, goodwill and reputation in the long run thereby creating a foundation for profitability in future. For instance, I believe that...
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...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...
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...conclusions about competitive position and options for future growth? To answer: 4. Why was Cucina Fresca pasta successful? First of all, because it’s healthy. Also it’s easy to cook, it’s fast and tasty (in comparison with pasta of another companies). Package has size for one time meal and right proportions of sauce and pasta. Each package has simple instructions for cooking process. For people who care about health and don’t have time to cook – it’s the best option. And on the market only two companies which provide this product. 5. How would you compare the pizza opportunity to that for pasta? I think that here can be two options: huge fail or more or less success. When company launched fresh pasta it was something completely new and thus huge success and large consumption. But pizza is completely different. It’s can’t be healthy food, so people can be interested in it and in case of good taste it can be successful, but with more possibilities it’s not going to be as good as it was with pasta, because according to exhibit 9 the main problem is expensive price even in comparison with take out and restaurants (45 % and 23 % respectively) and to have revenue and cover costs for new equipment price can’t be much more cheaper and it’s becoming a problem. Also rival company is going to launch the same product soon and trying to be the first mover now can end with a disaster....
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...Session 8,9- October 31, 2015 Segmentation and Targeting Case Discussion Case: Vanraj Mini Tractors: Is Small Beautiful? 1. Evaluate the attractiveness of different market segments for Vanraj? The segmentation can be done on the basis of the land holding, the type of soil (geographical) and by the type of the crop cultivated. The focus states for Vanraj Mini Tractors are MP, UP, Gujarat and Maharashtra. Field trials conducted to check its functionality in black and laterite soils have provided satisfactory results so segmentation on type of soil (geographical) doesn’t seem necessary. To understand and to solve the problem of choosing the right segment for Vanraj we have focused on the cost benefit analysis from the perspective of small farmers having average land holding (as per the report and economic survey) size of 1.4 hectare. It is noted that Majority of the tractors are bought on credit availed from banks. Due to restriction in credit from banks to marginal farmers as their land holdings are less than 3 acres; Vanraj may not be viable for them. Thus marginal farmers are not part of the target segment. But As per case to target small farmers they need to make them switch from use of bullocks or from the use of rented tractors to Vanraj. From the cost benefit analysis it would be possible for us to conclude that using Vanraj tractor provides clear advantage over using services of rented tractor by a small farmer. When we compare it with the use of Bullocks...
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...Case Study 2, Under Armour’s Strategy Under Armour is an emerging company in the sports apparel industry whose mission is to “Make all athletes better through passion, science and the relentless pursuit of innovation”. Under Armour was a disruptive innovator in the sports apparel industry by creating sports apparel using synthetic materials as an alternative to natural fibers, such as cotton. This important change in material resulted in a “shirt that provided compression and wicked perspiration off your skin rather than absorb it…that worked with your body to regulate temperature and enhance performance”. This promise to increase athletic performance differentiated it from competing sports apparel companies, but rivals have since implemented synthetic materials into their product lines. This case study seeks to analyze Under Armour’s history, resources, capabilities, and core competencies, business and corporate-level strategies, as well as the general environment and competitive landscape. After careful inspection of these varying areas, the factors contributing to Under Armour’s current success and future challenges will become clearer. The conception for Under Armour began over a year ago when CEO Kevin Plank played on the University of Maryland football team. Frustrated with having to repeatedly change his cotton shirt during practice, he envisioned a shirt whose materials allowed the perspiration to dry quickly, causing the athlete to be quicker, faster, and stronger...
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