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Competition is one of the cornerstones of the present-day markets. One should take into account when certain strategic movements are to be undertaken. Using the time-based approach, it is probable to distinguish first movers, fast followers, and late movers.
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As the term “first mover” implies, this market actor initially takes control over a certain market segment or a new market since there are no other companies in this sphere. In other words, a first mover is an organization that can reap benefit by means of selling innovative goods or providing new services and gaining the competitive advantage. For companies that seize the initiative, it means that not only the concrete moves or decisions play a significant part but also the period when they happen. Thompson, Strickland, and Gamble (2015) single out several conditions that result in first-mover advantages: creating the company’s reputation; clients’ switching costs growth; the impossibility of initial move imitation, and it is connected with property rights protections; the movement down the learning curve before competitors via an early lead; and the opportunity to establish a new technical standard in some industry. The example of Motorola is illustrative: communication services introduced by the company were completely new (Kerzner, 2011). As a result, the customers were given a chance to use new services, but the switching costs associated with changing the provider were high; moreover, the same services were unavailable.
Further, a fast mover may be defined as a business that implements the practices and findings of other companies quickly after they are launched by a first mover. The third type of market competitors is a late mover. Apparently, this company is the last one that represents a particular product or service. Collecting new ideas from other organizations’ experience, both fast followers and late movers manage to pick up only those helping them move forward and suitable for the current market situation. The main difference is the time when the changes are adopted. While fast followers respond to their competitors’ actions promptly, it usually takes late movers a significant amount of time to introduce the innovation within their organization.
One can recognize several conditions necessary for the successful performance of a fast follower and a late mover: unprofitable pioneering of goods and services in comparison with imitating and using other businesses’ experience; primitive products provided by a first mover and, consequently, the clients’ dissatisfaction; the presence of multiple market uncertainties that make it hard to understand or predict the future development; low customers’ loyalty rates; and the opportunity to copy first movers’ technologies and skills with ease (Thompson et al., 2015). As for the difference between fast followers and late movers, the former act almost immediately after a new product or a service are launched by a first mover, and the latter have not only implement the changes but also compete with fast followers that are likely to have achieved success by the moment a late mover starts working on the innovation.
The example of a fast follower is Boeing that was not the first airplane manufacturer: it demonstrated the wisdom of waiting and finally became a prosperous company (Kerzner, 2011). As for the late movers, Chinese businesses exemplify this phenomenon. For instance, Geely, the Chinese multinational automotive manufacturing company, is the late mover in this sphere since other companies have been acting in this area (Kerzner, 2011).
References
Thompson, A., Strickland, J., & Gamble, J. (2015). Crafting and executing strategy: The quest for competitive advantage (20th Ed.). New York, NY: McGraw-Hill Education.
Kerzner, H. R. (2011). Project management: A systems approach to planning, scheduling, and controlling. Hoboken, NJ: John Wiley & Sons.
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FAQs
TiVo, Redbox, Friendster, and Yahoo are examples of first-mover companies that lost out to second-mover companies (i.e., cable provider DVR and streaming services, Netflix, Facebook, and Google). These once-powerful pioneers break down the myth that first to market is always the strongest or best.
What is an example of a fast follower? ›
Fast Follower networks
Apple, Google, Facebook – these are also all examples of Fast Followers who have reaped the rewards of observing the mistakes of their predecessors.
What is first movers and fast followers? ›
First movers create bold new ideas, while fast followers assemble existing innovations to benefit their #business. Both #strategies can help companies stay ahead in a rapidly changing environment. Read on to know how. As we saw before, innovation can take many forms.
What is an example of a successful late mover? ›
Amazon: Most people do not remember Book Stacks Unlimited, the first Internet bookstore founded in 1992. Jeff Bezos waited until 2 years later to launch Amazon, but eclipsed Book Stacks Unlimited by capitalizing on the originator's lack of promotion.
Can you think of an example of a successful first mover? ›
First-Mover Advantage Examples
Amazon was the producer of the first online store for books that became immensely successful. However, before the other entrants created their online bookstores, Amazon had attained relevant brand recognition.
What is the difference between first mover and late mover? ›
The first mover may invest heavily in persuading consumers to try a new product. Later entrants would benefit from these informed buyers and would not need to spend as much on educating consumers. Later entrants can avoid mistakes made by the first mover.
What is an example of a first follower? ›
Recall the earlier example of choosing a drink at happy hour; this is an example of sequential behavior; the first person voices his or her decision, and then the second person (the first follower) agrees with that decision by following suit.
What is the difference between a late mover and a fast follower? ›
The main difference is the time when the changes are adopted. While fast followers respond to their competitors' actions promptly, it usually takes late movers a significant amount of time to introduce the innovation within their organization.
What is late mover advantage? ›
Here are a few ways in which being a late mover can be advantageous: Lower research and development costs, since the technology or product has already been developed by the first movers. Learning from the mistakes of the first movers and improving the product or service.
What are first movers in marketing? ›
A first mover is a service or product that gains a competitive advantage by being the first to market with a product or service. Being first typically enables a company to establish strong brand recognition and customer loyalty before competitors enter the arena.
Take, for example, Nokia. The Finnish phone manufacturer was a first mover in the mobile phone industry and dominated the market for many years. However, they failed to keep up with the shift towards smartphones and lost their position as a market leader.
Is Apple a first mover or fast follower? ›
Fast followers, such as Apple, let the first movers warm up the market for them. The first mover has already done the heavy work by conducting research, testing various options, and educating the consumer base on the product or service.
What are three advantages of being a first mover? ›
The first-mover advantage is the benefit of increased brand recognition , customer loyalty and increased sales that often accompany a business that is the first to enter the marketplace with a new product.
Can you think of an example of a successful a first mover b early follower and c late entrant can you think of unsuccessful examples of each? ›
Expert-Verified Answer
Apple, Samsung, and Lyft are successful examples of first movers, early followers, and late entrants respectively. On the other hand, Kodak, BlackBerry, and Blockbuster provide examples of unsuccessful attempts in their respective industries.
Are there any strategic advantages of being a follower or late mover? ›
Cost Efficiency: Late entrants can sidestep the colossal upfront costs and uncertainties associated with pioneering a market. They often enjoy the economies of scale and access to more advanced technologies, ultimately resulting in cost-efficient operations.
What is an example of a second mover strategy? ›
Examples of successful second movers include Amazon, Facebook, and countless non-market leaders that may not be billion dollar IPOs, but are still extremely valuable companies. Think about how many big financial services companies there are providing the same services.
What companies were the first movers? ›
While some well-known first movers, such as Gillette in safety razors and Sony in personal stereos, have enjoyed considerable success, others, such as Xerox in fax machines and eToys in Internet retailing, have failed.
What is an example of a first-mover advantage? ›
The advantages of first movers include time to develop economies of scale—cost-efficient ways of producing or delivering a product. The disadvantages of first movers include the risk of products being copied or improved upon by the competition. Amazon and eBay are examples of companies that enjoy first-mover status.
Is Coca-Cola a first mover? ›
Coca-Cola wasn't the first fizzy drink to enter the marketplace. Other brands, like Dr Pepper, were already in existence. However, when Coca-Cola launched in 1886, it immediately captured the largest market share, making it a first mover.
