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The First Mover Essay

1411 words - 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 ...view middle of the document...

Consumers who start using the first mover’s products may become accustomed to them and not want to try the late mover’s product. 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.
The first mover also gains markets share before the late mover and with market share comes loyalty from their consumers. Entering the market first builds a trusting relationship that many get used to and it is sometimes difficult for them to try other new products (AIU Online 2008).

Marketing strategy is an important part of any organizations strategic plan. Entering the market first gives the organization a good strategic position to launch campaigns to enhance revenue.
First movers can also benefit from technology and being the leader in that. For example if an organization patents their product this eliminates other from imitating their strategy. Also, an organization can establish their product as the industry standard making it more difficult for others to gain customer acceptance (Pearson, 2013).
First Mover Disadvantage
There are also risks and disadvantages associated with first movers. When moving into the market before other organizations there may be unexpected and unanticipated problems or cost that occur. Even with the most through research there are external issues which an organization has no control over that might arise.
The first mover has the task to convenience the consumer to buy or support their product. Many are skeptical of new products that are introduced to the market and the first mover runs the risk of being rejected. This...

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