First Movers And Market Followers Case Study

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Question B: A Study of First Movers and Market Followers
First Movers
First movers are companies that are first to enter a particular market. The advantage for such companies is that they are able to gain a great amount of market share as there is no competition at the beginning. Such companies engage in business and marketing strategies to attract many customers and gain their loyalty before market followers enter the competition.
Market Followers
Market Followers are companies that enter a particular market after the first mover and they follow the strategies and products developed by first movers or industry giants. Such companies hope to learn from the first movers and capitalize on the weaknesses or failures of the first movers to deliver a better product or …show more content…

A market follower is able to take advantage by imitating first movers as cost of imitation is considerably lower than innovation costs. - (Green et al 2004). Furthermore the Market follower is able to take advantage of the research and development already carried out by the First Mover. Moreover Market Followers could hire human resources from first mover companies to obtain all the technological and other information needed to successfully launch a product or a service.

Technological or market uncertainty
Once a First mover enters the market, there is a lot of uncertainty about consumers’ preferences etc. The Market Follower is able to learn from the mistakes of the First Mover and will be in a better position to produce and market products and services that better suit customer preferences. Toyota interviewed owners of Volkswagen to find out customers likes and dislikes and they were able to incorporate this to the design process of the cars they designed for the U.S market. (Lieberman & Montgomery, 1988, 47). Toyota was able to capitalize on the weaknesses of a first mover to provide a car which took into account customer

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