First Mover Advantage

Part of the elements of Core Competence (Imitability) - First or Early Mover Advantage - Pre-empting the competition and gaining dominant market share e.g. Apple Ipads. By reaching scale early on they can build high barriers to entry especially if patents are granted.

Companies who achieve first mover advantage often have the same features

• Scale and experience effects
• Price sensitive market
• Willing to commit capital ahead of the competition

However, first mover advantage can erode very quickly as new firms enter the market but avoid costly research and development and high set up costs. Also if competitors have an established and efficient supply chain and sales channels they can use that advantage to overcome other advantages enjoyed by the first mover.

See Also

• Causal Ambiguity
• Path Dependency
• Core Competence
• Modular v Architectural Innovation