Timing of entry Flashcards
Who is a first mover?
The pioneers, the first entrants to sell in a new product or service category
Who are the early followers?
The entrants that are early to market but not first
Who are the late entrants?
The entrants that do not enter the arket until the time the product begins to penetrate the mass market or later.
What are first mover advantages?
Being a first mover may confer advantages such as:
• Brand loyalty and technological leadership
• Preemption of scarce assets
• Exploiting buyer switching costs
• Reaping increasing returns advantages
What are first mover disadvantages?
- Research and development
- Undeveloped supply and distribution channels
- Immature enabling technologies and complements
- Uncertainty of customer requirements
What is a monopoly rent?
The additional returns that a firm can make from being a monopolist, such as the ability to lower costs through greater bargaining power over suppliers.
What is incumbent inertia?
The tendency for incumbents/officeholders to be slow to respond to changes in the industry environment due to their large size, established routines or prior strategic commitments to existing suppliers and customers.
