Some advantages include the idea early entrants can lead other companies in their understanding and use of technology in ways that are hard for later entrants to copy. Advantages of First-Mover Strategy. Sometimes there are even first-mover disadvantages, where companies that enter a market later can achieve greater results to those obtained by the first-mover firm. A first-mover advantage exists when making the initial move into a market allows a firm to establish a dominant position that other firms struggle to overcome ("First Mover Advantage" [Image missing in original]). Only a first mover with mighty resources, far superior to those of competitors, has any chance of achieving longer-term first-mover advantages when both technology and markets are moving rapidly. The disadvantages of being a first mover arise from several sources, including risk exposure, inertia, so-called “free-rider effects,” and shifts in technology and customer needs. It is true that there are advantages to being the first entrant to a new market, or the first to bring a new product or service to market. However, although there are examples of first-mover advantage (e.g. In a broader business context, the first-mover disadvantage can be defined as the negative results of being a market pioneer. Several advantages emerge when a firm takes a strategic move as the first-mover. F irst Mover Advantage: The Advantage Gained by a Company that First Introduces a Product or Service to the Market Via Corporate Finance Institute. Amazon and eBay are examples of companies that enjoy first-mover status. There are so many disadvantages that if you can avoid it, you should never be one. Being the first-mover means the firm is the first to initiate a strategic move Companies like eBay (first online auction firm), Honda (first motorcycle manufacturer). There is a risk that the leavers take some of the intellectual capital with them. The disadvantages of being the first mover are: – Some of the first-mover’s employees may leave the company and compete against it with new challenge brands. What Are the Advantages of First Mover Advantage? The idea is that a company gets in first and secures a long-term advantage. when a first mover can tie-up the market for scarce materials), it is much more common to see first-mover disadvantages. It can help to create strong brand recognition, for example. First Mover Advantage or First Mover Disadvantage? Advantages And Disadvantages Of Market Pioneering 1455 Words | 6 Pages. The disadvantages of first movers include the risk of products being copied or improved upon by the competition. They enjoyed first-mover advantages for a long time. or is a first-mover in a certain product-market field. An excellent book about this is the recently published Copycats by Oded Shenker. 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