Definition First-mover Advantage. Description.
 First-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 Special Interest Group
|
|
|
|
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
|
|
|
First-mover Advantage Sponsor
|
|
|
|
Special Interest Group Leader
|
|
|
|
|
All you need to know about management
|
|
|
Management Smart Card
|
|
|
|
|
Log in
Would you like to be our 