fter studying the third Session Topic entitled 'First Mover
Advantage' and also watching a video on the same topic, answer the following
questions:
1.
What are the advantages of becoming First Movers
in business?
Being the first to develop and market a product comes with
many prime advantages that strengthen a company's position in the marketplace.
For example, a first mover often gains exclusive agreements with suppliers,
sets industry standards, and develops strong relationships with retailers.
Other advantages include
• Brand
name recognition is the main first-mover advantage. Not only does it engender
loyalty among existing customers, but it also draws new customers to a
company's product, even after other companies have entered the market. Brand
name recognition also positions companies to diversify offerings and services.
Examples of dominant brand name recognition of a first mover include soft drink
colossus Coca-Cola (NYSE: KO), auto-additive giant STP (NYSE: ENR), and
boxed-cereal titan Kellogg (NYSE: K).
• Economies
of scale, particularly those regarding manufacturing or technology-based
products, is a massive advantage for first movers. The first mover in an
industry has a longer learning curve, which frequently enables it to establish
a more cost-efficient means of producing or delivering a product before it
competes with other businesses.
• Switching
costs let a first mover build a strong business foundation. Once a customer has
purchased the first mover's product, switching to a rival product may be cost
prohibitive. For example, a company using the Windows operating system likely
would not change to another operating system, because of the costs associated
with retraining employees, among other costs.
2. What are the challenges of becoming First Movers?
Despite the many advantages associated with being a first
mover, there are also challenges. Other businesses can copy and improve upon a
first mover's products, thereby capturing the first mover's share of the
market.
Also, often in the race to be the first to market, a company
may forsake key product features to expedite production. If the market responds
unfavorably, then later entrants could capitalize on the first mover's
3. What does a First Mover do in order to survive the
market?
First-mover have to concentrate on how firms achieve them.
The first is by creating a technological edge over
competitors. By starting earliest, first movers have more time than later
entrants to accumulate and master technical knowledge.
The second way is by preempting later arrivals’ access to
scarce assets—for example, a location on a city’s main street, talented
employees, or key suppliers.
The third is by building an early base of customers who
would find it inconvenient or costly to switch to the offerings of later
entrants.
Sumber:
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Materi Sesi 3 Mata Kuliah Bahasa Inggris Niaga
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First Mover Advantage: https://www.youtube.com/watch?v=eDaQcv9mjTI
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First Mover Definition: https://www.investopedia.com/terms/f/firstmover.asp
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The Half-Truth of First-Mover Advantage: https://hbr.org/2005/04/the-half-truth-of-first-mover-advantage
