First-Mover Advantage in the On-Line Industry Essay by audrey

First-Mover Advantage in the On-Line Industry
An exploration of the myth of first-moving companies and the accompanying strategic implications.
# 53568 | 2,787 words | 24 sources | MLA | 2004 | CA
Published on Nov 07, 2004 in Business (Industries) , Business (Marketing) , Computer and Technology (Internet)

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This paper examines how first-mover advantage is often an insurmountable gain by the first significant company to enter a new market and how there are numerous strategic implications of being a first-mover within the on-line industry. It looks at how, while there has been much discussion over first-mover benefits within such a dynamic industry, there has also been a great deal of criticism concerning the validity of this claim. Industry experts argue that there is no first-mover advantage. It explores the advantages of being a first-mover contrasted with a follower, the conditions that must be present for a first-mover to prevail and the "myth" of the first-mover concept. Case studies of both first-mover successes and failures pertaining to the online industry are also examined.

1.0 Introduction
2.0 The History of First-Mover Advantage
3.0 First-Mover Advantages and Disadvantages
3.1 First-Mover Advantages
3.2 First-Mover Disadvantages
4.0 Conditions Affecting First-Mover Success
5.0 The Myth of the First-Mover Advantage
5.1 Measuring First-Mover Advantage
5.2 Research Supporting First-Mover Advantage
5.3 Research Challenging First-Mover Advantage
6.0 Strategic Implications
7.0 Case Studies
7.1 First-Mover Successes
7.2 First-Mover Failures
7.3 Case Study Key Learnings
8.0 Conclusion
Appendix A: Advantages of First-Movers
Appendix B: Previous Research Findings

From the Paper:

"The concept of a first-mover-advantage is by no means a new phenomenon, but during the Internet boom, the term became highly fashionable and was touted as instrumental to an entrant's success. The belief was that the first company to stake out a business category would inevitably dominate the market. This principle was reinforced by the fact that there were successful first-movers who immediately became industry legends. Journalists and market researchers used the concept to explain the rise of such upstarts as Amazon - the first large online bookstore, eBay - the first online auction service, and Yahoo - the first Web directory. Consultants around the world strongly urged their clients to enter new areas of business, particularly in the online industry, in which first-mover advantage soon became a religion."

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