First Movers Advantage: Benefits, Disadvantages and Examples

The first-mover advantage is the benefit of increased brand recognition, customer loyalty and increased sales that often accompany a business ... FindjobsCompanyreviewsFindsalariesUploadyourresumeSigninSigninEmployers/PostJobStartofmaincontent CareerGuideCoronavirusJobResourcesFindingaJobMoreResumes&CoverLettersInterviewingStartingaNewJobResumeSamplesPay&SalaryCareerDevelopmentCareerPathsCoverLetterSamplesCoronavirusJobResourcesFindingaJobResumes&CoverLettersInterviewingStartingaNewJobMoreResumeSamplesPay&SalaryCareerDevelopmentCareerPathsCoverLetterSamplesCareerDevelopmentFirstMoversAdvantage:Benefits,DisadvantagesandExamplesFirstMoversAdvantage:Benefits,DisadvantagesandExamplesByIndeedEditorialTeamNovember3,2021TwitterLinkedInFacebookEmailCopytoClipboardBeingthefirstcompanytoenterthemarketplacehassuchastrongcorrelationwithsuccessthatthispracticehasitsownterm—thefirst-moveradvantage.Aswithanystrategy,however,beingafirstmoverisnotwithoutitscorrespondingdisadvantages.Knowinghowtobalancethebenefitsanddownsidesofperformingasafirst-movercanhelpthecompanyyouworkformaximizetheirmarketimpact.Inthisarticle,weexplainwhatthefirst-moveradvantageis,describethebenefitsofbeingafirstmover,highlightthedisadvantagesofbeingafirstmover,provideexamplesoffirstmoversanddetaillatemoversandfastfollowers.Whatisthefirst-moveradvantage?Thefirst-moveradvantageisthebenefitofincreasedbrandrecognition,customerloyaltyandincreasedsalesthatoftenaccompanyabusinesswhoistheveryfirsttoenterthemarketplacewithanewproduct.Inmostcases,companiesachievethefirst-moveradvantagethroughsavvymarketingandadvertisingthatpositionstheirproductnotonlyasthefirstinitsfieldbutalsoasthebestoptionforconsumerswhencompetitorsinevitablyarriveonthemarket.Related:HowToMeasureandImproveCustomerLoyaltyin5Steps(WithBenefits)Benefitsofbeingafirst-moverPositioningyourselfasafirst-moverprovidesanumberofbenefits,including:ExtensivesupplieroptionsWhenyourorganizationisthefirstinthemarketplacewithanewproduct,yourcompanywilloftenhaveanextensivelistofsupplierstoworkwith.Youcannegotiateexclusivecontractswiththebestmanufacturersandothersupplychainproviderstoensureacost-effectivemodelthatprovidescustomerswithahigh-qualityproduct.DefiningindustrystandardsAsthefirstinthemarket,yourproduct,andthemanufacturingpracticesyouestablish,willsettheindustrynormsasotherbusinessesenterthemarketplace.Ratherthanrelyingonstandardssetbyanothercompanyorworkingwithintheconfinesofapre-establishedmarket,yourorganizationwilldefinethemanufacturingandmarketingpracticesforyoursegment.DevelopingretailerrelationshipsYou'llbuildexcellentrelationshipswithawiderangeofretailersastheonlycompanyinthemarketwithyourproduct.Themorepopulartheproductis,themorestoreswillwanttoworkwithyouandfeatureyourproductontheirshelves.Whencompetitorsenterthemarket,you'llalreadyhaveasolidpositionwithintheretailframework.IncreasedbrandrecognitionCustomerswillquicklylearntoassociateyourbrandwithyourproductsinceitwillbetheonlyoneonthemarket.Brandrecognitionoftenleadstoincreasedsalesandthedevelopmentoflong-termcustomerrelationships.Readmore:BrandRecognition:DefinitionandHowItWorksEstablishingeconomiesofscaleDependingontheindustry,thefirstfewmonthsofproductioncanbecostlyuntilyourorganizationhasfoundthemostefficientandeconomicalwaytomanufactureyourproductandbringittomarket.Beingthefirstinthemarketplacegivesyoutimetomoldyourmicro-economyandestablishacost-effectivesystembeforeanycompetitorsenterthesector.Readmore:EconomiesofScale:DefinitionandTypes(WithExamples)DefiningcustomerloyaltySomeindustriesorproductsproduceloyalcustomersduetotheinitialinvestmentintheproduct.Forexample,ifyousellcomputersoftware,it'sunlikelyacustomerwillswitchtoacompetitorafterinstallingyourproductbecausethetimeandexpenseofmigratingdigitalsystemsarenotworthanypotentialcostsavings.Beingthefirsttomarketincreasesthistypeofnecessity-drivencustomerloyalty.Related:CustomerLoyaltyvs.BrandLoyalty:What'stheDifference?Disadvantagesofbeingafirst-moverBeingafirst-moverisnotwithoutitsrisks,however.Considerthesedisadvantagesbeforerushingtomarket:SuperiorcompetitionThebiggestandmostprescientdisadvantageofbeingafirstmoveristhepotentialadvantageitofferstoyourcompetitors.Forexample,afterexaminingyourproduct,acompetitormightbeabletoreverseengineertheworkyou'vedoneandcreateanearlyidenticalproductmuchmorecheaply,potentiallycuttingintoyourcustomershareonceyourcompetitortakestheirproducttomarket.RushingdesignInanefforttobetheveryfirstonetosellyournewproducttoconsumers,yourcompanymightrushthedesignandtestingstageofproductdevelopment,leadingtoaproductthat'snotasoptimalasslower-movingcompetitors'productsmightbe.MisreadingpainpointsDespiteintensivemarketresearch,someproductsthatcompaniesaresurewilladdresscustomerpainpointsturnouttobelowsellers.Beingfirsttomarketwithaproductthatdoesn'tappealtocustomerscanbeacostlyerror.EducationcostsAsthefirstcompanytointroduceanewproduct,you'lllikelyspendasubstantialamountoftimeandmoneyeducatingyourcustomersabouttheproduct,itsusesanditsbenefits.Competitorsenteringthemarketafteryouwon'thavetospendtheirmarketingbudgetoneducation,potentiallyincreasingtheirshareofthemarket.Related:8TypesofMarketingCampaignstoBoostBusinessExamplesoffirstmoversFirstmoverscanoccurinanyindustry,buttheytendtobemoreprevalentinsomefieldsoverothers.Considerthesegeneralexamplesofsuccessfulfirstmovers:TechnologyThetechnologyspaceisfulloffirstmovers.Thisfieldisconstantlyinnovatingandfindingnotonlynewmethodsforachievinggoalsbutalsoentirelynewproductsforconsumerstouse.Considertechnologicalinnovationslikesmartphones,tabletsandsmartspeakers,allofwhichhadaninitialfirstmoverthatdominatedthemarketplacebeforecompetitorsarrived.AutomobilesTheautomotivefieldisanotherthat'sbenefitedfromfirstmoversovertheyears.Therewas,ofcourse,theintroductionoftheveryfirstcar.Sincethen,variouscarmakershavedesignednewtypesofvehiclesandenginesthatentirelychangedtheautomotivespaceandcustomerdesires.Consider,forexample,theintroductionoftheminivanorthefullyelectricvehicle.Asinglemanufacturerinitiallycreatedtheseproductsbeforecompetitorsjoinedthemarket.ConvenienceitemsConvenienceproductsareabroadercategorythatalsotendstomakeanimpactinthefirstmoverspace.Forexample,considerluggageoptimizedforairplanes.Beforeairtravelwasubiquitous,mosttravelersusedlargesuitcasesorcheststotransporttheirpersonaleffectsfromoneplacetoanother.Ascommercialplanetravelincreased,aluggagemanufactureraddedwheelstotheirsuitcasetomakeiteasiertopullthroughtheconcourse.Eventually,competitorsfollowedsuit,changingtheluggagelandscape.Related:HowtoUseGuerrillaMarketingtoExpandYourBusinessWhatisalatemover?Alatemoverisacompanythatentersthemarketplacewithanewproductsubstantiallyaftertheircompetitorshavedebutednewproducts.Latemoversoftenchoosetheirtimingpurposefullytoensuretheirproductisoptimizedtomeetcustomerneedsandcanbeproducedascheaplyaspossibletosavethecompanymoney.Related:ALookintoCustomerNeedsandHowToIdentifyThemWhatisafastfollower?Afastfollowerisacompanythatquicklyimitatesafirstmoverandentersthemarketplacewithacompetingproductasfastaspossible.Fastfollowershopetocapitalizeontheinitialconsumerinterestinthenewproductandearnsomeofthefirstmover'smarketsharewithoutinvestingsubstantialtimeormoneyinmarketingorcustomereducation.ReadMoreHowToCreateBrandMessagingFrameworkin8StepsGuideTothe4BalancedScorecardPerspectivesandWhyTheyMatterHowToDoaBusinessPlanAnalysisRelatedArticlesWhatAreBasisPoints(BPS)?DefinitionandExamplesTheBestWaysToJobShadowandNetworkVirtually9WaysToBuildanEffectiveCollegeNetwork