1st Movers vs. Late Movers

In: Business and Management

Submitted By dboose
Words 765
Pages 4
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 attributable to the timing of entry (entry costs)
High advertising cost and entrenched in their original ways of doing things
Followers learning from 1st movers mistakes giving them advantages over more efficient processes and technologies. Disadvantages of Late Mover:
*Access to resources will be harder after the 1st mover has access to the best industry resources.
Market Acceptance…...

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