First-mover Advantage

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Description of First-mover Advantage. Explanation.


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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 th...

First-mover Advantage Special Interest Group

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Best Practices - First-mover Advantage Premium

Expert Tips - First-mover Advantage Premium

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Resources - First-mover Advantage Premium

How to Sustain Competitive Advantage?

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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

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