Being the first in the market has its own advantages and disadvantages. Likewise, being a later mover has its advantages and disadvantages. This essay focuses on identifying the advantages and disadvantages of being a first mover or later movers, four examples of real firms who have been successful and four examples of real firms who have been failures using each theory. Additionally, the paper will recommend the best theory that the company should use to get the product into the market (Burrows, 2008; Daye, 2010). First mover or Later Mover Theory The time a company launches a product into the market is crucial and determines the chances of success. There is an existing notion that being a first mover to invent or introduce a product into the market always leads to success. However, others believe that chances of being successful are higher when a company waits for others to introduce the product first so that you can imitate some of their ideas. Being the first mover does not always give a company the first mover advantage. Advantages of First Mover Being the first to introduce a product helps a business gain competitive advantage over potential competitors. This is so because they are able to gain the loyalty of customers before the rivals set in. Being first mover give a company advantage in acquisition of resources before competition set in resulting in competition for the resources. Being first movers give a company the benefit of building strong brand recognition before rivalry emerges.
Another advantage is that the company gets the opportunity to register trademarks and patents of their invention afore other companies get into the market. This gives the company competitive advantage (Daye, 2010). Advantages of Late Mover Late movers do not invest much since they are imitators and rely on first mover’s investment. Late movers easily gain acceptance since similar product is already in the market and they do not have to educate consumers much since they are already aware of a similar product. Later movers are advantaged since they can accommodate customer needs and preference that may have arisen after the first launching of product. Additionally, later movers can forecast how customers will react to the imitated product and respond accordingly. Disadvantages of 1st Mover The company has to edify customers on how to use the new product, which can be costly. Additionally, the company has to educate all the individuals in the supply chain on how the product works. Another disadvantage is that a company can make serious and costly mistakes. Other companies can learn from such a mistake and become advantaged competitors to the inventor. The other disadvantage occurs when a first mover realizes their idea was not good enough and another company had a related idea and launches the product. The company will thus have no time to modify their idea and enjoy first mover advantage (Davis, 2007). Disadvantages of Late Mover If the first movers had registered trademarks and patents, the later movers may not be able to imitate the product. Another disadvantage is the difficulty in convincing customers to switch from the first movers product. Another advantage is the strain to establish brand recognition since the first movers had already gained brand loyalty. Later movers face challenges in resource acquisition due to competition with first mover and other companies that could be already in the ma