Competition is one of the cornerstones of the present-day markets. One should take into account when certain strategic movements are to be undertaken. Using the time-based approach, it is probable to distinguish first movers, fast followers, and late movers.
As the term “first mover” implies, this market actor initially takes control over a certain market segment or a new market since there are no other companies in this sphere. In other words, a first mover is an organization that can reap benefit by means of selling innovative goods or providing new services and gaining the competitive advantage. For companies that seize the initiative, it means that not only the concrete moves or decisions play a significant part but also the period when they happen. Thompson, Strickland, and Gamble (2015) single out several conditions that result in first-mover advantages: creating the company’s reputation; clients’ switching costs growth; the impossibility of initial move imitation, and it is connected with property rights protections; the movement down the learning curve before competitors via an early lead; and the opportunity to establish a new technical standard in some industry. The example of Motorola is illustrative: communication services introduced by the company were completely new (Kerzner, 2011). As a result, the customers were given a chance to use new services, but the switching costs associated with changing the provider were high; moreover, the same services were unavailable.
Further, a fast mover may be defined as a business that implements the practices and findings of other companies quickly after they are launched by a first mover. The third type of market competitors is a late mover. Apparently, this company is the last one that represents a particular product or service. Collecting new ideas from other organizations’ experience, both fast followers and late movers manage to pick up only those helping them move forward and suitable for the current market situation. The main difference is the time when the changes are adopted. While fast followers respond to their competitors’ actions promptly, it usually takes late movers a significant amount of time to introduce the innovation within their organization.
One can recognize several conditions necessary for the successful performance of a fast follower and a late mover: unprofitable pioneering of goods and services in comparison with imitating and using other businesses’ experience; primitive products provided by a first mover and, consequently, the clients’ dissatisfaction; the presence of multiple market uncertainties that make it hard to understand or predict the future development; low customers’ loyalty rates; and the opportunity to copy first movers’ technologies and skills with ease (Thompson et al., 2015). As for the difference between fast followers and late movers, the former act almost immediately after a new product or a service are launched by a first mover, and the latter have not only implement the changes but also compete with fast followers that are likely to have achieved success by the moment a late mover starts working on the innovation.
The example of a fast follower is Boeing that was not the first airplane manufacturer: it demonstrated the wisdom of waiting and finally became a prosperous company (Kerzner, 2011). As for the late movers, Chinese businesses exemplify this phenomenon. For instance, Geely, the Chinese multinational automotive manufacturing company, is the late mover in this sphere since other companies have been acting in this area (Kerzner, 2011).
References
Thompson, A., Strickland, J., & Gamble, J. (2015). Crafting and executing strategy: The quest for competitive advantage (20th Ed.). New York, NY: McGraw-Hill Education.
Kerzner, H. R. (2011). Project management: A systems approach to planning, scheduling, and controlling. Hoboken, NJ: John Wiley & Sons.