First Mover & Last Mover Theories
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Discuss the advantages and the disadvantages of the first mover and the last mover theories
You should provide an unbiased comparison of the two theories.
1. Identify at least four advantages and four disadvantages for each theory and comprehensively show how each advantage or disadvantage affects the use of that theory (a minimum of 16 pros/cons in all).
2. Identify at least four examples of real firms who have been successful and four examples of real firms who have been failures using each theory (a minimum of 16 real firms in all).
3. Provide a definitive and unbiased recommendation of which theory to use. You should provide the specific attributes which constitute the most advantageous context in which the chosen theory operates and justify your recommendation with researched support, logic and examples.
Deliverable Length: The deliverable length shall be of five to seven pages (cover page and reference page not included). As a graduate business student, you are required to provide a well-researched and analyzed comprehensive response to every assignment question. Brief, vague, generic, or non-definitive responses will not earn good grades.
You are welcome and encouraged to use the David text book and the course materials that came for this course.
For reference us the APA guide available as shown in the virtual campus under "interactive learning"
Objective: The Objective of the Unit 3 IP Assignment will involve the following the Course Outcomes and Grading Criteria with their respective percentages for the Grading Rubric:
• Discuss the opportunities provided by technology for businesses. (20%)
• Identify examples of good and bad business practices in the use of strategy design components. (30%)
• Apply critical thinking skills to analyze business situations. (30%)
• Use effective communication techniques. (20%)
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This solution explains first mover and last mover theories. The sources used are also included in the solution.
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The first mover advantage is the advantage gained by the initial significant occupant of a market segment. This advantage is also called technological leadership. The first advantage that first movers get is that they get large profit margins and a status similar to a monopoly. For example, a company develops a new type of smart phone before the competitors develop a similar product the company enjoys a large profit margin. The second advantage that the first mover gets is that it has a technological leadership (1). If the company has used a new technology, the company must be able to patent it. The company gets technology leadership. For example, a company develops a new technology that can prevent auto accidents. The company enjoys technological leadership till the technology is emulated and similar products enter the market. The third advantage that the first mover enjoys is that he gets first access to scarce resources. He can pre-empt the resources so that other firms cannot get access to those resources. For example, a first mover makes an innovative turbine for airplanes. The new turbine requires a special metal that is rare. The company purchases all the mines that produce the metal. The competitors cannot produce the same turbine because they do not have access to the metal. The fourth advantage that the first mover has is that the first mover can erect barriers that do not allow late movers to enter the market. For example, the company can obtain exclusive selling right in a region from the government precluding competition.
The first disadvantage that first mover has is that the late movers can study the techniques and strategies of first movers before they enter. They get a free ride on the first movers by not having to incur expenditure on research and development, education, and other laboratory facilities. The second first mover disadvantage is that the first mover has to create a new market as well as face the challenges of new technology. For example, the first mover has to incur considerable cost in developing a market for the new product. Similarly the first mover has to deal with new technology problem. The third disadvantage of first mover is that he may face a weak consumer demand. There may be a change in consumer demands and requirement between the time when the first market assessment was made and when ...
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