FACTORS INDICATING FIRST-MOVER ADVANTAGES AND SECOND-MOVER ADVANTAGES

Diploma

 Abstract

 

Many studies has been made in order to understand the concept of first-mover advantages and second-mover advantages but the researchers are divided in their opinions of which factors are influencing and to what extent these factors influence the companies. Therefore, a framework was developed which unifies and explains the factors indicating first-mover advantages and second-mover advantages and also the importance of these factors in three different industries.


Background

Everybody has heard of companies, which by being the first-mover have gained an extremely high market share and have had a sustained competitive advantage for decades. Examples of those companies are Coca-Cola and Gillette. A company who has the opportunity to be a first-mover will therefore rush into a new market/product segment with no second thoughts.  Not many know that a company named Star introduced the safety razor more then twenty-five years before Gillette…

 

As stated above the first-mover advantages have been overemphasised in the industrial life but the theoretical research about first-mover advantages and disadvantages has been different. Many researchers have been looking at many aspects of the issue from many points of views. However, the main research has been performed in The United States on the American market and therefore lacks an international perspective on the issue. The literature also lacks a model overreaching how the different types of first-mover advantages and second-mover advantages affect the industries. Because of this, a model has been developed, showing the different influences of first-mover advantages and second-mover advantages in three industries with both international and Swedish companies in the Swedish market.

Research problem

The problem, which we want to examine through our research, is the following:

To what extent do first-mover advantages and second-mover advantages exist relatively in different lines of businesses?