First Mover and Market Follower Essay

923 Words Jul 5th, 2013 4 Pages
Question B
2.1 Introduction to First Mover and Market Follower
When it comes to having a competitive advantage, a firm would be looking at generating higher sales or market share over its competitors. Competitive advantage can be achieved by many ways in terms of low cost, providing niche products or services. Another type of competitive advantage is the first mover. The first mover is termed as a firm being the first to move into a particular market with this services or product. There are significant advantage and risks involved in being the first mover. Market followers are essentially firms which enter into a known market which has been well established. The firms would start off with a smaller market share but are able to benefit
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Following which we now see the likes of Alibaba.com and many other smaller competitors.
An example of a market follower is Amazon.com. The originator of the idea of selling books online was initiated by Books.com however they were not able to sustain the market when Amazon.com penetrated the market with extensive marketing. Eventually, Amazon.com who came in as a market follower managed to gain most of the market share and is a leading online book store.
It is such not an easy task to determine which is better, the first mover or market follower but given most of the circumstances and historical evidences a market follower would have a better chance of survival as the market follower is able to perform lucrative study on the first mover and the customers’ demands before staging a move into the market. It also give a great advantage from leveraging on the educational efforts put in by the first mover to market the product and services whereby the market follower would just have to produce similar product or services and find an alternative competitive advantage such low cost strategy in building its market share.
2.5 Conclusion
It is essential to adapt a competitive advantage strategy in business. Careful study of the market is essential determine if creating a new market or entering a known market is more profitable. Monopolizing the niche market is key to maintain the market share when it comes to first mover and ensuring the

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