Strategic Management

First Movers hope to gain a sustainable competitive advantage by establishing themselves before competitors enter the market. This allows these types of movers to make a lasting impression on the industry’s consumers. Brand recognition and brand loyalty are two of the main reasons as to why I think first-movers have succeeded. This could also be because there is more time to perfect products and services.

There are advantages that late movers have that I think have aided in their success. For example, avoiding the economic burden of having to establish a market. In most cases it is worse to be a follower; however, in these circumstances, it may work out in the organizations favor as the organization can learn from the mistakes of first movers.  The processes established by first movers can also be refined and may be able to input greater efficiency and ultimately, a cost reduction. However, on the other hand, there are also disadvantages to being a late mover. This is because there is less of a chance of controlling resources, as this is most likely to happen if you are a first mover.

The opportunities available, the risks involved of entering at that time, as well as both the internal and external environments are what I think dictates the timing of being either a first or late mover. However, being a first or late mover will also dictate market power (lower if you are a late mover), as well as the strategic options available, both of which may affect return on investments and profitability. Therefore, yes, internal and external circumstances both play a role in what dictates the timing of being a first or late mover.  

Besides the examples of first movers listed (Coca Cola, etc), there are also a few other successful first movers. This includes Sony; a company with a strong brand name, and also a substantial amount of resources. It was also built upon legendry’s Ibaku Masaru, who built the mission upon “doing things no one else is willing to do” (http://www.pearsoned.co.uk/bookshop/article.asp?item=312). Another example of a great first mover is Amazon; they were the first major online bookstore, after which Barnes and Noble was introduced. However, Amazon has been able to maintain their first mover advantage through partnerships, and extending product offerings to meet consumer needs, and changing trends. It has become a “one stop, shopping destination,” (http://www.referenceforbusiness.com/management/Ex-Gov/First-Mover-Advantage.html).