Essay about The First Mover

1393 Words Oct 14th, 2013 6 Pages
Kelly Holm
American InterContinental University
Professor Bennett
MGT 680 -1303D-01

The first mover theory implies that the first organization to enter the market has the upper hand in that market. There are advantages and also disadvantages to any theory. We will discuss in this paper some advantages as well as disadvantages of this theory.

The First Mover Theory The First Mover Theory implies that the first company to enter a new market gains them superior brand recognition as well as customer loyalty. This is a form of competitive advantage for organizations to gain. There are however, pros and cons to being the first mover and the late mover. Late Mover Advantages
Entering the market as a late
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Industry standard is accomplished by the first mover and the consumer may not want to learn a new standard or product.
The first mover is able to strategically pick the location of prime office space and manufacturing facilities giving them a better location for sales and production. They also have the advantage of hiring skilled diverse individuals to enhance creativity and innovation of their product.
Late movers do not have the advantage of establishing relationships with distributors, suppliers and establishing a solid network and access to best source of supplies and resources (Worstall, 2012). The first mover gets the head start on the market and it may be difficult for the late mover to catch up.
Market standard are set with the first mover. When entering the market after the standards is met it might be difficult to meet and persuade the consumer to try you product.
First Mover Advantage
Being the first mover has more advantages then disadvantages. The benefit of secure access and commitment to rare resources is a necessity when entering a new market. This allows an organization to build important relationships with suppliers and distributors.

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