Having the first mover advantage in a market can be extremely important. This is true in most markets, but is especially true when it comes to technology. A recent article in Popular Science illustrates this fact beautifully. The story describes how the iClone and other knock-offs are stealing, reverse engineering, and replicating US goods. About halfway through the article, the author describes how the Korean tech company LG lost marketshare in China with their "Chocolate" phone. The product was cloned in China before the official LG phone could be released. By the time the release was made official, the clone had already been on the market for months. The article said:
Quality wasn't an issue. The fake phone was "exactly like the real one in design," a company spokesperson told Chosun Ilbo, Korea's largest daily newspaper. "Chinese people think it's LG electronics that manufactures the fakes."The concern of being first to market is a concern with other tech products as well. Remember the release of the Playstation 3? Sony was the leader in the game market for several years with their Playstation 2. However, after Microsoft announced that they were working on a next-gen XBox, the race was on... and then over. The PS3 was released in late 2006, nearly a year after the XBox 360 had been on the market. PS3 was never able to recover.
There can be some risks associated with being the first mover. Being first to market also means that you will be the first to make mistakes; mistakes that your competitors can learn from. Coke Vanilla was on the market a full year before Pepsi Vanilla debuted. According to an article in The Copernicus MZine, it took less than 4 weeks for Pepsi Vanilla to win the market. The reason was because Pepsi learned that people didn't like the stronger Vanilla taste in Coke. They countered by creating a Pepsi with a lighter Vanilla flavor.
There is a lot of information about the first mover advantage floating about on the web. I may re-visit the topic again in the future to examine many of the articles calling the First Mover Advantage a myth. There may be validity to that statement, but I'll look into it more later.
Thanks for visiting. -Sincerely, Trevor Stasik.
First Mover Advantage, iClone,Chocolate, Playstation 3, Business Strategy