Table 1. Advantage mechanisms available... | Emerald Publishing

Table 1.

Advantage mechanisms available to early movers and diligent followers at the time of market entry

Advantage mechanisms	Opportunities for early movers at market inception	Opportunities for diligent followers when the market evolves
Establishing technological leadership	By entering first, pioneers are able to shape a nascent market (Storbacka and Nenonen, 2011). The first-to-market can set (technological) standards and establish a dominant design that organizes a market to suit it (Chiesa et al., 2002). This can be done via patent registrations or other forms of IP protection (Rayna and Striukova, 2009). Alternatively, they can try to influence the adoption of regulations and standards by regulatory bodies in order to benefit from these (Ordeix-Rigo and Duarte, 2009; Doganova and Karnoe, 2015)	While first movers must typically innovate radically during the fluid phase of industry/market formation, market followers may get a free ride on first movers’ product innovation (Schnaars, 1994) and/or surpass them based on incremental innovation (Utterback, 1996; Poletti et al., 2011). Thus, instead of participating in the race towards a dominant standard for a new market, later entrants that adhere to a dominant design once it is settled can leapfrog the originators (Tegarden et al., 1999; Afuah, 2009)
Pre-emption of critical assets or access to them	Early entrants can build up asset advantage (Finney et al., 2008) by: pre-empting resources (Bohlmann et al., 2002), securing access to scarce or superior input factors (Boulding and Christen, 2008), building up initial production capacity (Lieberman and Montgomery, 1988) and acquisition of (potential) competitors (Vidal and Mitchell, 2013)	When the market grows, scale becomes vital, and such growth can inhibit first movers’ ability to pre-empt scarce resources (Suarez and Lanzolla, 2005). If this happens, new entrants will have more opportunities to invest in specific assets – or acquire them – to enhance production, and exploit complementary resources (Kogut, 1988; Robinson et al., 1992)
Locking in key customer (segment)s or pre-empting access to them	First movers can set up entry barriers for newcomers by raising buyer switching costs. These can be particularly powerful if a user must make dedicated investments to adapt to a new product or enters into contractual commitments with a first mover (Lieberman and Montgomery, 1988) Equally, first movers can leverage early entry by forging strong bonds with customers (Ghemawat, 1986), notably by engaging in high-encounter situations with a (launching) user community (Zack, 2005) In addition, by acting early, first movers have the opportunity to be identified with a (new) product category (Fosfuri et al., 2013). This can create a mental anchoring effect in the customer’s mind (Molina-Castillo et al., 2012), and cause demand to gravitate towards them. Also, first movers are typically viewed as innovators and differentiators, which appeals to specific customer segments (Kim and Mauborgne, 2005)	Once the number of buyers grows, the ratio of first-hour customers to newcomers declines. Similarly, the share of customers that are locked into the original technology or solution shrinks, and switching or opt-out costs fall (Beggs and Klemperer, 1992) Second movers can also benefit from entering later, as by the time they enter, (mainstream) customer preferences are clearer (Schnaars, 1994). Moreover, once routine users, late adopters and laggards outnumber early adopters, focusing on average customers becomes more profitable than battling for trendsetters Similarly, as customer preferences can change and evolve over time, first movers may embark on a mistaken product course (Rayna and Striukova, 2009), while later entrants can avoid such errors Later entrants can also piggyback on the effort that pioneers must invest in educating the market and raising concept visibility. As such, for diligent followers, it can be easier to connect with growing streams of users (Schnaars, 1994)

Advantage mechanisms	Opportunities for early movers at market inception	Opportunities for diligent followers when the market evolves
Establishing technological leadership	By entering first, pioneers are able to shape a nascent market (Storbacka and Nenonen, 2011). The first-to-market can set (technological) standards and establish a dominant design that organizes a market to suit it (Chiesa et al., 2002). This can be done via patent registrations or other forms of IP protection (Rayna and Striukova, 2009). Alternatively, they can try to influence the adoption of regulations and standards by regulatory bodies in order to benefit from these (Ordeix-Rigo and Duarte, 2009; Doganova and Karnoe, 2015)	While first movers must typically innovate radically during the fluid phase of industry/market formation, market followers may get a free ride on first movers’ product innovation (Schnaars, 1994) and/or surpass them based on incremental innovation (Utterback, 1996; Poletti et al., 2011). Thus, instead of participating in the race towards a dominant standard for a new market, later entrants that adhere to a dominant design once it is settled can leapfrog the originators (Tegarden et al., 1999; Afuah, 2009)
Pre-emption of critical assets or access to them	Early entrants can build up asset advantage (Finney et al., 2008) by: pre-empting resources (Bohlmann et al., 2002), securing access to scarce or superior input factors (Boulding and Christen, 2008), building up initial production capacity (Lieberman and Montgomery, 1988) and acquisition of (potential) competitors (Vidal and Mitchell, 2013)	When the market grows, scale becomes vital, and such growth can inhibit first movers’ ability to pre-empt scarce resources (Suarez and Lanzolla, 2005). If this happens, new entrants will have more opportunities to invest in specific assets – or acquire them – to enhance production, and exploit complementary resources (Kogut, 1988; Robinson et al., 1992)
Locking in key customer (segment)s or pre-empting access to them	First movers can set up entry barriers for newcomers by raising buyer switching costs. These can be particularly powerful if a user must make dedicated investments to adapt to a new product or enters into contractual commitments with a first mover (Lieberman and Montgomery, 1988)Equally, first movers can leverage early entry by forging strong bonds with customers (Ghemawat, 1986), notably by engaging in high-encounter situations with a (launching) user community (Zack, 2005)In addition, by acting early, first movers have the opportunity to be identified with a (new) product category (Fosfuri et al., 2013). This can create a mental anchoring effect in the customer’s mind (Molina-Castillo et al., 2012), and cause demand to gravitate towards them. Also, first movers are typically viewed as innovators and differentiators, which appeals to specific customer segments (Kim and Mauborgne, 2005)	Once the number of buyers grows, the ratio of first-hour customers to newcomers declines. Similarly, the share of customers that are locked into the original technology or solution shrinks, and switching or opt-out costs fall (Beggs and Klemperer, 1992)Second movers can also benefit from entering later, as by the time they enter, (mainstream) customer preferences are clearer (Schnaars, 1994). Moreover, once routine users, late adopters and laggards outnumber early adopters, focusing on average customers becomes more profitable than battling for trendsettersSimilarly, as customer preferences can change and evolve over time, first movers may embark on a mistaken product course (Rayna and Striukova, 2009), while later entrants can avoid such errorsLater entrants can also piggyback on the effort that pioneers must invest in educating the market and raising concept visibility. As such, for diligent followers, it can be easier to connect with growing streams of users (Schnaars, 1994)

Source: Compiled by the authors