Unit 3 Individual Project

Running head: First Mover Theory vs. Late Mover Theory

First Mover Theory vs. Late Mover Theory

Precillia C Hinton

American Intercontinental University

MGT 680 Strategic Management

Dr. Samia Friesen

May 9, 2012

Abstract

For this paper, it will describe the advantages and disadvantages on first mover theory and late mover theory. It will also provide many examples of successful and unsuccessful companies on both theories. This paper will end with recommendations about which of the two theories would be best for its managers of the company to implement.

First Mover Theory vs. Late Mover Theory

A part of success for any business company has a market penetration and established products, services, and reputation of that business. All companies or businesses will put their effort, time, and money on the development on different market and business strategies to further enhance and improve their productivity and operation. Management staff of a specific business will decide whether to develop a brand new product not yet seen within marketplace or a version of competitor’s product that was already being launched into marketplace. Management staff of a company will called a meeting to discuss their business strategies and want to know if they will adopt the “first mover” or “late mover” theory. With this problem in hand, this information will develop a meeting that will provide evidence whether it will support or disagree on these theories.

Body – First or Late Mover Theory

It has been reported that the first mover advantage theory suggests that first movers into a new industry will gain an advantage such that barriers for new entrants become very high or even insurmountable (2003). In addition, this advantage originates from early adoption by users, which allows a firm to capture a large percentage of market shares early on. Thus, by the time competitors are able to enter the market, the first mover will have already established...