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The Disadvantages of the Late Mover Theory

Updated March 23, 2017

Each industry has a number of competing firms. The first firm to offer a product or service to a market is a first mover in that industry. These first mover firms enjoy a number of advantages. The firms that enter the market later in the game are the late movers. These late mover firms face some disadvantages.

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Access to Resources

The first mover has access to the best industry resources. They are able to strategically locate their office space and manufacturing facilities. They can hire the best talent. This gives them an advantage over those who enter the market later. The late mover will have to work harder to overcome this advantage.

Market Acceptance

Customers who start using the first mover's products may become used to them. They may not be interested in switching to a late mover's products. This is another disadvantage to being a late mover. The first mover establishes industry standards and customers get used to them. They may not find it worthwhile to learn to use or accept another product.

Head Start

The first mover gains a pioneer status in the industry. They develop skills and are more familiar with the industry and its workings than the later mover. The first mover is able to establish a sales and distribution network and access the best source of supplies. The late mover has to catch up with the first mover in terms of learning the business and establishing business contacts.

First Movers Don't Always Finish First

Although first movers to a market enjoy some advantages over the late movers, it is not always a given that the first to enter the market will be the most successful. For instance, even though Google was not the first search engine in use, it has developed a dominant market position. The late mover with strong resources and capabilities could overtake the first mover. The first movers will have to compete with the late movers to maintain their advantages.

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