First-mover advantages are gained by those companies that are the early entrants to an industry
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journal article Journal of Marketing Vol. 56, No. 4 (Oct., 1992) , pp. 33-52 (20 pages) Published By: Sage Publications, Inc. https://doi.org/10.2307/1251985 https://www.jstor.org/stable/1251985 Read and download Log in through your school or library Alternate access options For independent researchers Read Online Read 100 articles/month free Subscribe to JPASS Unlimited reading + 10 downloads Purchase article $41.50 - Download now and later Abstract Numerous conceptual and empirical studies advance the notion that first movers achieve long-term competitive advantages. These studies purport to demonstrate the presence of a systematic direct relationship between order of entry for products, brands, or businesses and market share. However, an objective assessment of the literature suggests that this view must be qualified. A broadened perspective is presented that highlights the complexity of this phenomenon and suggests that first-mover status may or may not produce sustainable advantages because of a multiplicity of controllable and uncontrollable forces. A conceptual framework identifying factors that underlie first-mover advantage and product-market contingencies that moderate the order of entry-competitive advantage relationship is proffered. Several research propositions relevant for marketing theory and practice are presented. Journal Information The Journal of Marketing (JM) develops and disseminates knowledge about real-world marketing questions relevant to scholars, educators, managers, consumers, policy makers and other societal stakeholders. It is the premier outlet for substantive research in marketing. Since its founding in 1936, JM has played a significant role in shaping the content and boundaries of the marketing discipline? Publisher Information Sara Miller McCune founded SAGE Publishing in 1965 to support the dissemination of usable knowledge and educate a global community. SAGE is a leading international provider of innovative, high-quality content publishing more than 900 journals and over 800 new books each year, spanning a wide range of subject areas. A growing selection of library products includes archives, data, case studies and video. SAGE remains majority owned by our founder and after her lifetime will become owned by a charitable trust that secures the company’s continued independence. Principal offices are located in Los Angeles, London, New Delhi, Singapore, Washington DC and Melbourne. www.sagepublishing.com Rights & Usage This item is part of a JSTOR Collection. Abstract This study examines whether first-mover and early-mover advantages can be sustained in an industry where the barriers to entry are generally low and new product innovations can be easily imitated-namely, the money market mutual fund industry. Using a simultaneous-equation supply-and-demand model of panel data from a variety of money market fund product categories, the study finds that first-movers and early-movers enjoy both a highly sustainable pricing advantage and a moderately sustainable market share advantage. These counterintuitive results are interpreted in terms of the structural characteristics of demand in the industry. Implications of these results for the ongoing debate between the 'sustainability' and 'hypercompetition' perspectives are discussed. Journal Information Strategic Management Journal publishes original refereed material concerned with all aspects of strategic management. It is devoted to the improvement and further development of the theory and practice of strategic management and it is designed to appeal to both practising managers and academics. Strategic Management Journal also publishes communications in the form of research notes or comments from readers on published papers or current issues. Editorial comments and invited papers on practices and developments in strategic management appear from time to time as warranted by new developments. Overall, SMJ provides a communication forum for advancing strategic management theory and practice. Such major topics as strategic resource allocation; organization structure; leadership; entrepreneurship and organizational purpose; methods and techniques for evaluating and understanding competitive, technological, social, and political environments; planning processes; and strategic decision processes are included in the journal. Strategic Management Journal is currently published 13 times a year. 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Wiley has partnerships with many of the world’s leading societies and publishes over 1,500 peer-reviewed journals and 1,500+ new books annually in print and online, as well as databases, major reference works and laboratory protocols in STMS subjects. With a growing open access offering, Wiley is committed to the widest possible dissemination of and access to the content we publish and supports all sustainable models of access. Our online platform, Wiley Online Library (wileyonlinelibrary.com) is one of the world’s most extensive multidisciplinary collections of online resources, covering life, health, social and physical sciences, and humanities. Rights & Usage This item is part of a JSTOR Collection. What is meant by firstWhat Kind of First-Mover Advantage? A first-mover advantage can be simply defined as a firm's ability to be better off than its competitors as a result of being first to market in a new product category.
Are the advantages gained by early entrance into a market?Being first typically enables a company to establish strong brand recognition and customer loyalty before competitors enter the arena. Other advantages include additional time to perfect its product or service and setting the market price for the new item.
What is the firstA market participant has first-mover advantage if it is the first person and gains a competitive advantage through control of resources. With this advantage, first-movers can be rewarded with huge profit margins and a monopoly-like status.
Which strategy first or late mover is better to use for entering a new market?Simply put, a first-mover advantage is a company's capacity to outperform its competition by being the first to market in a new product area. Being the first to enter a market often allows a firm to create high brand awareness and customer loyalty before competitors enter the fray.
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