First Mover Advantage
FIRST-MOVER ADVANTAGE
TECHNOLOGICAL LEADERSHIP
Experience curve Patents R+D, product development, process Ec. Scale production, distribution
PREEMPTION SCARCE RESOURCES
Patents, Physical – natural resources, products Channel space
Lower prices Superior position - geográphical space - technological space - clients perceptual space - attractive niches
FIRST – MOVER ADVANTAGE (2)
GENERATES SWITCHING COSTS
Attract clients Accept suppliers Quality uncertainty Brand loyalty Net effect – first product receives more attention
LATE - MOVER ADVANTAGES
Benefits from previous investments ( free-rider effect)
Skilled labour Buyer education Infraestructure development
Imitation costs / Innovation costs Less market and technological uncertainties Technological discontinuities First-mover inertia Fixed assets transformation costs Fear of cannibalization Harvest or adapt ? Organisational blinders Suppliers stable relationships
FIRST-MOVER ADVANTAGE Pace market evolution slow fast
slow Pace technological evolution
Calm waters
Difficult differentiation for late-movers
Market leads
Big sales
fast
Technology leads
Low sales, losses
Rough waters
Difficult to maintain advantage
Source: Suarez, Lanzolla, HBR, April, 2005
FIRST-MOVER ADVANTAGE Context S/T Calm waters Market leads Technology leads Advantage L/T Brand awareness, resources Marketing, distribution, production capacity, design. R+D, product development, financial resources R+D, Marketing, distribution, production Key resources
Long term advantage, easy maintain technology updated, respond demand increases. Time to satisfy new segments, difícult differentiation by late-entrants.
Short term advantage with limited resources
Difficult short term advantage, limited sales, losses, new competitors
Rough waters
Difficult long term advantage,technology in evolution, high obsolescence, high maintenance, service mature products, fear cannibalization
TECHNOLOGICAL LEADERSHIP
Experience curve Patents R+D, product development, process Ec. Scale production, distribution
PREEMPTION SCARCE RESOURCES
Patents, Physical – natural resources, products Channel space
Lower prices Superior position - geográphical space - technological space - clients perceptual space - attractive niches
FIRST – MOVER ADVANTAGE (2)
GENERATES SWITCHING COSTS
Attract clients Accept suppliers Quality uncertainty Brand loyalty Net effect – first product receives more attention
LATE - MOVER ADVANTAGES
Benefits from previous investments ( free-rider effect)
Skilled labour Buyer education Infraestructure development
Imitation costs / Innovation costs Less market and technological uncertainties Technological discontinuities First-mover inertia Fixed assets transformation costs Fear of cannibalization Harvest or adapt ? Organisational blinders Suppliers stable relationships
FIRST-MOVER ADVANTAGE Pace market evolution slow fast
slow Pace technological evolution
Calm waters
Difficult differentiation for late-movers
Market leads
Big sales
fast
Technology leads
Low sales, losses
Rough waters
Difficult to maintain advantage
Source: Suarez, Lanzolla, HBR, April, 2005
FIRST-MOVER ADVANTAGE Context S/T Calm waters Market leads Technology leads Advantage L/T Brand awareness, resources Marketing, distribution, production capacity, design. R+D, product development, financial resources R+D, Marketing, distribution, production Key resources
Long term advantage, easy maintain technology updated, respond demand increases. Time to satisfy new segments, difícult differentiation by late-entrants.
Short term advantage with limited resources
Difficult short term advantage, limited sales, losses, new competitors
Rough waters
Difficult long term advantage,technology in evolution, high obsolescence, high maintenance, service mature products, fear cannibalization