Question 1
Usually, the inventors of new technologies are the first movers in the market place, however, in most cases, the followers of these new technologies are more successful than the ones who actually had the idea. Take for example the case of Ford and General Motors. Ford holds the record for being the first company who mass-produced cars and they started with a big market share. However, as time went on, they focused on reducing their production cost, while General motors focused on producing differentiated varieties of their products until such time that General Motors realized bigger market share compared to Ford. (Blank, 2010) One of the primary reasons why followers become more successful than their first movers in the market is because first movers have higher failure rates. Naturally, followers have lower failure rates since they have learned some lessons from the first movers.
Another reason for this is the tendency of the first movers to be mismanaged. Take for example the case of Netscape and Internet Explorer. Netscape first became successful than Internet Explorer, however, Netscape is almost gone today but Internet Explorer is hitting markets today and continuously increasing its market share. Internet Explorer’s management strategy is to bundle their product with MS Office to increase their market share and eventually achieving the top spot. AltaVista was one of the first technology leaders in terms of search engines, however, it is almost gone today while Google rules. AltaVista’s management didn’t know that their technology had big potential of getting successful so necessary resources were not invested. Google’s management on the other hand, took time to study the potentials of this new technology and invested the required resources. Today, Google is indisputably the king of the internet. (Robinson, 2004)
Question 2
Timing of entry strategies is very important because this can dictate the flow of how business. However, while creating a plan on how to launch a product, the company must make an assumption that this business will have numerous competitors in the market thus the need to look for ways to gain competitive advantages over them.
References:
Blank, Steve (2010). Why pioneers have arrows in their back. Retrieved from http://steveblank.com/2010/10/04/why-pioneers-are-the-ones-with-the-arrows-in-their-backs/
Hollingworth, Mark (2008). Strategic Assumptions: The Essential (and Missing) Element of Your Strategic Plan. Retrieved from http://www.iveybusinessjournal.com/topics/strategy/strategic-assumptions-the-essential-and-missing-element-of-your-strategic-plan#.UZcfQLVA33Q
Robinson, William T. (2004). First-Mover Advantages from Pioneering New Markets: A Survey of Empirical Evidence. Review of Industrial Organization 9: 1-23, 1994. Kluwer Academic Publishers. Retrieved from http://nmims.edu/wp-content/uploads/2012/p3/SBM/Gurumurthy%20Kalyanaram,%20Survey%20of%20Empirical%20Evidence,%20Pioneering%20Advantage%20(1994).pdf
