First-mover Advantage

Knowledge Center

   

Description of First-mover Advantage. Explanation.

Contents

  1. Summary
  2. Forum
  3. Best Practices
  4. Expert Tips
  5. Resources
  6. Print
 

Definition First-mover Advantage. Description.


First Mover AdvantageFirst-mover Advantage is the competitive edge gained by the first significant company to introduce a product or service in a market by having the shortest Time to Market. Although there are certainly benefits associated with being the first or at least the first significant or early in an market, this may or may not actually translate into business success.

Like always, being the first-mover only makes sense if the rewards justify the risks. Some industries reward first-movers with near-monopoly status and high margins. Other industries don't, allowing late-movers the chance to compete more effectively and efficiently against early entrants.


Also it's good to separate operational speed (move quickly) (Operational Agility) from strategic speed (increase the ability to move quickly) (Strategic Agility).


It is important to recognize that first-mover status is not an end in itself, but rather the beginning of a longer and much more complex strategy in which the initial advantage has to be defended against competitors and imitators.


The main drawbacks of trying to be the first mover are:

  • High Costs (technology, R&D, distribution channels, marketing know-how).

  • High Risks. Market and technological uncertainties. Will the judgment that X will be a killer product for market Y be valid?

  • Free Rider Effects. Competitors can study the first mover and copy or cherry pick its strategies, processes, products, employees and/or technologies.


First-mover Advantage Forum
  Which Companies are Good at Being the First?
What kind of companies are best suited to being the first? What are their characteristics?...
     
 

First-mover Advantage Special Interest Group


Special Interest Group

 

Best Practices - First-mover Advantage Premium

Expert Tips - First-mover Advantage Premium
 

The Importance of Customer Differences in Markets with Network Effects: the Limits of Scale

The network effect (Metcalfe's Law) is the phenomenon that the value of a product or serv...
Usage (application): Network Effect, Network Strategy, First Mover Advantage, Second-mover Strategy, Customer Intimacy, Market Segmentation
 
 
 

Entrepreneurial Strategies in Emerging Markets

Chanvatipsakul and Wongsurawat (2013) examined the reasons why SMEs are successful in entering emerging markets while big companies with more resource...
Usage (application): Emergent Strategy, Entrepreneurship, Strategic Innovation
 
 

Resources - First-mover Advantage Premium

How to Sustain Competitive Advantage?

This presentation is about the question how a competitive advantage can be sustained. The presentation begins with competitive advantage and moves fro...
Usage (application): Business Strategy, Sustaining Competitive Advantage, Sustainable Competitive Advantage,
 
 

News

First-mover Advantage
     
 

Videos

First-mover Advantage
     
 

Presentations

First-mover Advantage
     
 

More

First-mover Advantage
     

Compare also: Blue Ocean Strategy  |  Strategic Window  |  Time to Market  |  Competitive Environment  |  Experience Curve Effects  |  Organizational Resilience  |  Entrepreneurial Organization  |  Second-mover Strategy  |  Art of War (Sun Tzu)  |  Sustainable Competitive Advantage

Special Interest Group Leader

You here


 

Return to Management Hub: Marketing  |  Strategy


More on Management  |  Return to Management Dictionary  | 

 

This ends our First-mover Advantage summary and forum.

About 12manage | Advertising | Link to us | Privacy | Terms of Service
Copyright 2016 12manage - The Executive Fast Track. V14.1 - Last updated: 4-12-2016. All names tm by their owners.