Looking to Become the First Mover Advantage Company? Stay in the Loop

A business strategy professional should possess the traits of identifying the competitive advantage in becoming the first mover in the market.

First mover advantage strategy! What strikes a business professional’s mind when they hear such terms? Perhaps the first company to move in the business market or probably the first company that makes huge strides in the business market.

Before we delve deeper, let us first try and understand the exact meaning of ‘First Mover Advantage.’

Precisely, “the First Mover Advantage Strategy” helps in enabling companies to develop a solid brand recognition along with the services and brand loyalty even before there’s any intervention of competitors in the market.

But, hold on! For every strategy, you’ll always find the upside and the downsides.

In addition to this, business strategy professionals need to note that such a strategy is applicable only for large companies moving into the business market.

Let us glance at the pros and cons of this strategy.


As a first-mover company, they’re likely to gain benefits such as: -

  • To be able to be the first to tap into the targeted audience to create an impression resulting to brand loyalty and brand recognition
  • Becoming the controller of certain resources such as placing themselves in the strategic position, being able to create a premium contract with the contractors and stakeholders, and being first to recruit brilliant employees
  • Equip to be the first company in gaining benefits while swapping the cost for customers as compare to the ones who have entered the market in the later stage
  • The first to launch their product and services to be standard in the market

In 1998, Prof. Montgomery and Lieberman highlighted three major advantages in their award-winning paper: -

  1. The control of resources – they have complete ownership of controlling scare as well as strategic resources. One perfect example is Wal-Mart, they could establish their stores in hamlet and also avert competitors from pushing through the market.
  2. Buyer-switching costs – first-mover companies have the advantage to relish buyer-switching costs. As such if the company manages to establish its brand in the first place, the only customers that will look to switch to another product would be the ones who’re inconvenient with the product.
  3. Gaining technology leadership – as a first-mover company, initiating to create the first technology and product provides advantages to the later entrants in the market to imitate. Doing so allows the later entrant companies to leverage their production costs and define a definite cost.


At times proclaiming to be the first company in the market might not be a good call for the business.

  • Late entrants tend to learn from the early movers in the market
  • The first-mover company might need to invest a lot more than what is required. Also, it can be a challenge to the company in convincing the customers to try their services and product
  • Identifying the loopholes can be their biggest achievement since they would not make the same mistake the first company made
  • Companies who would have moved later have the advantage of reverse engineering their products as well as develop their products at a much cheaper price

Complying with the above statement, a business strategy professional must be able to grasp the advantages. Although there are disadvantages as well, identifying what is right and relevant should be the key strategy for these experts. P&G is known as the company in regards to adopting the “First Mover Advantage.” The impact of the business boomed stupendously, and this was because of their technical efficiency and perhaps sheer luck.

Here are some of the names of other companies who were not first-movers yet made great strides in the business market – Southwest Airlines, Starbucks, and Google.






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