It doesn’t matter how you started, what matters is how you progress, finish what you have started, and keep staying on the top of the game. It is a principle that every entrepreneur and firm will agree with, whether the first-mover or late-mover of the product in the market.
So why firms such as eBay was first to market with an online consumer to consumer and business to consumer auction, and still be able to achieve long-run success in a wide competitive industry? Or Coca-Cola, the first cola producer who began selling its product to the public in 1886, and has continued to lead in the industry ever since, why is that? Firms like Amazon, who was the first to successful introduce electronic books using “Kindle” device, the best e-Reader out there that made possible to bring your book collection wherever you go at the tip of your finger. Perhaps by being the first one to introduce the new product in the new market, the first mover usually accumulate enough market control, expertise and customer loyalty to remain on top.
But, does it mean all first-movers are successful as they should with the first-in advantage? Truth could be just the opposite. It appears, in most cases, late-comers do have more advantages over first-movers. One, it could be because the road has already been paved for them by the first movers or the market leaders. By learning from the pioneers struggles and failures, it is easy for them to enter into the market and compete and take over the lead by doing minor product development changes, updates, and innovations, also by applying better marketing strategies, and being committed to consistently deliver. For instance in the world of social media, it used to be MySpace, Friendster, but now have been replaced and succeeded by social medias like Facebook, Twitter, Instagram, and WhatsApp. LinkedIn has overtaken Monster, CareerBuilder, HotJobs, and now is known as the most effective, and fast growing job opportunity seeking engine. Do you remember those days when Yahoo was on top? But it is not a secret that Yahoo is continuingly being overshadowed by Google.
There are so many reasons why above mentioned successful pioneers are successful, and why the unsuccessful ones were unsuccessful. First, the recognition of being the first to introduce the product or service, and setting standards by which others products or services are to be compared, help pioneers to influence and shape consumer preferences, and to stay on top of the market. By being first into the market, pioneers do have freedom of a certain time frame to setting industry marketing standards and gaining economies of scale without being destructed by competitors, and once this is established, sometimes it can be hard to beat. Because consumers do have a tendency to stick to products or services that they have come to trust, even when it costs more they will not switch to other available alternatives.
But sometimes, if not used chances very wisely, being the first doesn’t guarantee success. If you are first to the market and yet do not rapidly continue to enhance the product to stay out in front to the competition, it means you are setting yourself to be unsuccessful. For instance in the case of technology, the need of continuously, increasingly, and highly successful product creativity in technology innovation to be met according to customers demand is very essential. Apple for instance; was not the original pioneer of online music, the Smartphone or the tablet. But they did follow others into these markets and today Apple is the number one leader in digital technology innovation. Just to mention a few, iTunes, iPod, iPhone, iPad, you name it. Another disadvantage that first-movers have is they carry the entire burden, investment costs of being first to creating the product or service, and having to be the first ones to educate the market of their products and services, and establishing market pricing.
No matter how good it sounds of the advantage of being the first-mover in the market, but in some circumstances, it’s much better to enter late. Examples of big late-movers firms that were able to succeed big and stay on the market are YouTube, Facebook, Google, and Microsoft. Late movers and market challengers often imitate the technological advances of other firms or reduce risks by waiting until a new market is established. Late entrants are often more successful than their pioneering competitors because creating a product is costly, both in terms of the money invested and the mistakes made on the path to success. While the pioneer pays a steep price in creating the product category, the later entrant can learn from the experience of the pioneer, enjoying lower costs of production and investments, and making fewer mistakes as a result.
In most cases though, companies that always innovating will always stay on top! Keep innovating!
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