Timing of Entry
Student’s Name
University Affiliation
Question One
First Movers
The Coca-Cola Company is a good example of a successful first mover. Although Coke was not the first soda to be introduced in the market, it was the biggest. On debut in 1886, Coca-Cola immediately became a consumer favorite, selling over a million gallons per year.
Blockbuster, the video rental company, is a good example of a company that eventually became unsuccessful. The company believed their physical stores were enough for their customers. However, this was not the case. The company could not keep up with competitors such as Netflix and, therefore, filed for bankruptcy in 2010 (Flor & Mortizen, 2017).
Early Followers
Google, which is currently one of the world’s best search engines, was not the pioneer search engine. Other search engines such as Yahoo were developed much earlier. However, Google became so successful, and they now control 64% of search activity.
A company such as Pepsi is a good example of an early unsuccessful follower in the market. Pepsi launched years after Coke was already established. However, the Company was unable to penetrate the market successfully. It went bankrupt twice and eventually rebranded.
Late Entry
Boeing company is a good example of a successful late entry in the market. The company has revolutionized the jet industry replacing lead companies such as Lockheed. The Hummer company, though a late entry in the market, was unsuccessful. The company developed a vehicle the was big and expensive. It also consumed a lot of gas. However, the company shut down after a significant decrease in sales (Lee et al., 2014).
Question Two
Without an iota of doubt, being a first mover in a market does not guarantee success. First movers are usually benchmarking platforms for anyone else who is potentially following in their footsteps. Several disadvantages might inhibit the success of a first mover. Being the first to launch a product or service in the market is quite expensive. First and foremost, the first mover is navigating in an unknown legal and regulatory territory, which is expensive. Educating consumers in the new market is also expensive. For instance, Gillette company spent millions to develop the product known as Mach3. Years later, another company developed a near-identical product that did not cost nearly as much to develop. First movers find it difficult to estimate this cost, and that’s why a simple product may become very expensive to produce. When doing something, new mistakes are expected because there is no prior experience to learn from (Lee et al., 2014). However, some companies may not be able to afford such mistakes.
First movers may also experience regulatory resistance that may limit their success. For instance, Uber services were suspended in countries such as Spain and South Korea. They were unable to meet the legal requirements in these countries, thus limiting the use of their services. Regulatory resistance can either stop the operations of your business or add to the cost of production. Google launched Google glass in 2013. Being a first-mover in this particular product, they had to deal with a lot of issues such as privacy rights and underdeveloped technology and health concerns. However, all these issues became too much to handle and the product was discontinued. However, years later, companies such as Snapchat have picked off from where Google left (Flor & Mortizen).
In conclusion, being a first-mover only has a competitive advantage if those in charge of a company understand the risks involved with becoming complacent (Haidar, 2020).
References
Flor, C., & Moritzen, M. (2017). Entering a New Market: First-Mover Advantages and Risk Dynamics under Market Uncertainty. SSRN Electronic Journal. https://doi.org/10.2139/ssrn.2980245
Haidar, J. (2020). Late-movers outperform first-movers in export markets. Economics Letters, 196, 109565. https://doi.org/10.1016/j.econlet.2020.109565
Lee, D., Choi, K., & Nariu, T. (2014). First-Mover and Second-Mover Advantage in a Vertically Related Market. SSRN Electronic Journal. https://doi.org/10.2139/ssrn.2447158
Shakina, E., & Barajas, A. (2020). ‘Innovate or Perish?’: Companies under crisis. European Research On Management And Business Economics, 26(3), 145-154. https://doi.org/10.1016/j.iedeen.2020.06.002