Henry Ford is often credited with saying that he would rather be the first person to be second. This is strange coming from the innovator of the mass-produced automobile in the United States.
So is the first-mover advantage a myth, or is it something that every firm should strive for?
First movers are considered to be the ones that initially introduce an innovative product or service into a market segment.
The theory is that doing so creates an almost impenetrable competitive advantage that later entrants find difficult to overcome.
However, history is replete with situations where second or later movers find success. If the best way to succeed in the future is to understand the past, then an understanding of why certain first movers succeeded and others failed should be instructive. This exercise requires you to investigate a first mover and identify specifically why, or why not, it was able to hold onto its firstmover advantage.Part One Pick an industry that you find of interest. This assignment can be done individually or in a team. Research that industry and identify one or two instances of a first mover—the introduction of new offering into new market segments. For example, you might pick consumer electronics and look for firms that initiated new products in new market segments. Your choice of industry must be approved in advance by your instructor as duplication of industry is to be avoided.
Part Two Each individual or team is to present their findings with the discussion centering on the following:
• Provide a brief history and description of the industry chosen.
Was this a fast-, standard-, or slow-cycle market at the time the first mover initiated its strategic action?
• How has innovation of new products been accomplished traditionally in this industry: through new firms entering the market or existing firms launching new offerings?
• Identify one or two first movers and provide a review of what happened when they entered that industry. Describe why the product or offering has been successful or why it failed.
• What did you learn as a result of this exercise? Do you consider the first mover a wise strategy; is your answer dependent on industry, timing, or luck?