Many surveies have been conducted in the United provinces about whether a first-mover advantage is a beginning of sustainable competitory advantage, but there is still a argument whether this is true or non. My research proposal focuses on the first-mover ( Dis ) advantages and the resource-based position of a house, which will be applied to the European Mobile phone industry, to analyze whether first-mover advantages are truly beginnings of a sustainable competitory advantage.
This research aims to reply the undermentioned research inquiry:
“ Are first mover advantages truly a beginning of a sustainable competitory advantage in the European nomadic phone/tablet industry? ”
To reply this research inquiry, the following sub inquiries are made up, which together will give an reply to the research inquiry:
What are the positions on competitory advantage within the positions of the industry construction and the resource-based position, and which restrictions exist?
What is a first-mover advantage and how can an organisation addition advantage of this?
Is the first-mover advantage sustainable in an industry?
Can a latecomer in the industry overcome “ latecomer ” disadvantages and successfully derive a taking place?
This research consists of two parts, a theoretical block and an empirical block. The theoretical portion introduces bing cognition about two competitory watercourses of thought and first-mover advantages. This is done by a comprehensive literature survey. The chief purpose of this portion is to associate old research with this survey. The 2nd block concerns the empirical research.
This assignment is a research proposal, which implies that the existent field research will non be a portion of this study. This means that no existent decisions and treatment can be provided.
Chapter two discusses the literature reappraisal. This chapter includes different watercourses of believing refering theories about competitory advantages, which finally will be related to first-mover advantages. Chapter 3 uses the input from chapter 2 to develop a theoretical theoretical account and to explicate hypothesizes. This chapter forms the footing of the research that has to be carried out. Chapter 4 will discourse the methodological analysis. The methodological analysis subdivision is about ‘the scientific discipline of happening out ‘ ; it describes the processs for scientific probe ( Babbie, 2009 ) . Besides the informations aggregation procedure, this chapter is besides about cogency and dependability. Finally, this chapter besides deals with the existent information analysis methods that are used to set the research into pattern.
One of the chief issues in scheme research is: Why do organisations differ in their behaviour and their profitableness? In replying this inquiry, research workers have frequently selected to see organisations as independent entities endeavoring for competitory advantage from either external industry beginnings ( e.g. Porter, 1980 ) or from internal resources and capablenesss ( e.g. Barney, 1991 ) . The ability of a house to achieve long-run public presentation advantages is rare so ( Wiggins & A ; Ruefli, 2002 ) . It is suggested that organisations that adopt a first mover scheme, are able to procure sustainable and positive economic results ( Lieberman and Montgomery, 1988 ) . A critical pick is the entry timing ; whether to be the first mover or waiting to travel. Bing the first mover brings is hazardous, but the returns are significant ( Porter, 1998 ) . The industry construction is confronting a alteration, where the degree of competition is acquiring higher. Organizations have to come up with schemes that suits the changeless changing environment. Consequently, organisations ‘ resources are utile to dicker and vie in the competitory industry. This position is in line with the resource-based position that suggests that resources represent a mechanism for deriving a competitory advantage ( Veliyath and Fitzgerald, 2000 ) .
In competitory scheme, there are different positions. In my old paper about “ Strategic confederations, Competitive advantage, and Industry kineticss ” I proposed a model in which several competitory theories are incorporated, to explicate how to derive a sustained competitory advantage in a web. With this model, I had the purpose to foreground the importance of several competitory theories, combined with a web position, in order to bring forth a sustained place in a market, where several standards ‘s should be met. I argued that looking from a individual competitory watercourse in non sufficient in the dynamic market organisations ‘ face these yearss. An incorporate model is presented, in which several competitory positions are merged with a web position, in order to be able to measure and asses the relationships of an organisation, that eventual lead to a higher market portion. For farther account of this model I recommend my pervious paper.
In the undermentioned two subdivisions, two competitory watercourses will be discussed. On the one manus, the external analysis, in order to measure possible chances and menaces. On the other manus, the internal analysis, which helps us to specify the strengths and failings of an organisation.
Thompson ( 1967 ) defines inceptions in his book ‘organizations in action ‘ as unfastened natural systems confronted with both internal and external uncertainnesss. Because of the premise that under the status of uncertainnesss organisations try to make their ends in a structured mode, organisations try to seek for closing to apologize the behavior of making concern. By planing and structuring the house to run into the environment ( and its demands ) in an optimum manner, houses determine their ‘task environment ‘ by finding their sphere. Thompson grounds as follows: A house ‘s environment is literally the remainder of the universe or everything else. Because of the comprehensive nature of this definition, he adopts the construct of ‘task environment ‘ used by Dill ( 1958 ) to denote those parts of the environment which are relevant or potentially relevant to end scene and end attainment ( Thompson, 1967 ) . Dill found the undertaking environment to be composed out of four major sectors: ( 1 ) clients ; ( 2 ) providers ; ( 3 ) rivals ; ( 4 ) regulative groups.
In the five-forces theoretical account, the strategic pick is based upon five competitory forces, which are dickering power of clients, dickering power of providers, the menace of replacements, the menace of the entry of new rivals, and the strength of competitory competition. It helps organisations to find chances and menaces, in order to bring forth a better apprehension of the industry construction, which could take to new possibilities and actions for strategic alteration. To cut down the menace of entry, Porter ( 1985 ) suggested to implement barriers to entry by working economic systems of graduated table, by distinguishing their merchandises, by working cost advantages independent of graduated table, by implementing arrange detering schemes or by promoting the authorities to enforce barriers to entry. An organisation additions a competitory advantage by positioning itself into a favourable industry-specific state of affairs. These places are cost leading, distinction or focal point ( Porter, 1985 ) .
The five-forces theoretical account stresses that the chief factor of house public presentation is the industry in which an organisation operates. However, research has shown that there is frequently more heterogeneousness in the public presentation of organisations within an industry than there is in the public presentation of organisations across industries ( Rumelt, 1991 ) . By following the industry as the unit of analysis, the intra-industry heterogeneousness in public presentation can non be explained and the attraction of an industry can non be evaluated independently of the alone accomplishments and capablenesss that an organisation brings to that industry ( Barney & A ; Hesterly, 1996 ) .
An debut to first-mover advantages
Organizations are invariably seeking to surpass other organisations, by implementing different, superior schemes. Harmonizing to Porter ( 1996 ) , an organisation can surpass rivals when the organisation is able to make a difference that it can continue. The organisation is able to make so by ( 1 ) presenting greater value to clients, ( 2 ) create comparable value at lower cost or ( 3 ) do both. Lieberman & A ; Montgomery ( 1988 ) suggested that an organisation following a first mover scheme might be able to procure and prolong positive returns.
I define the first-mover advantages as “ advantages in footings of the ability of open uping houses to gain positive economic net incomes ” ( Lieberman & A ; Montgomery, 1988 ) . Research point out that open uping organisations obtaining superior resources and capablenesss, bask first-mover advantages and therefore generates higher degrees of market portion or fiscal grosss than ulterior entrants ( Frawley and Fahy, 2006 ) . First movers may derive advantages from several beginnings, such as larning effects, control of scarce resources or by making buyer-switching costs ( Boulding and Christen, 2001 ; Lieberman and Montgomery, 1988 ) . Lieberman and Montgomery ( 1988 ) argue that there are three beginnings of advantage from first traveling. The first beginning of advantage is about the preemption of scarce resources. The 2nd beginning of advantage comes from technological leading, which consequences from successful patents and R & A ; D and from larning curve effects. The 3rd category trades with act uponing the behaviour of purchasers ( exchanging costs ) . Lieberman ( 2008 ) added a 4th beginning, which is referred to as web effects. “ These possible beginnings of advantage can be offset, nevertheless, by higher costs or hazards faced by the innovator ” ( Lieberman, M. , 2005 ) . The possible beginnings will be discussed in the undermentioned subdivision.
Advantages derived from first traveling are gained when certain conditions surround the move ( Lieberman & A ; Montgomery, 1998 ) . A status could be the nature of an organisation ‘s internal features. These features can play a important function in the grade to which foremost mover advantages and sustainable public presentation additions are being realized. Research highlights the significance of specific internal features and first moves ( Szymanski, Troy, & A ; Bharadwaj, 1995 ) , but the relationship among internal features of an organisation, foremost traveling, and public presentation is non clear yet ( VanderWerf & A ; Mahon, 1997 ) .
Potential beginnings of first-mover advantages in the nomadic phone industry
Preemption of scarce assets
Earlier research on first-mover advantages showed that market entrants could be able to get superior resources of different types and select the most attractive niches, such as ( 1 ) physical resources, ( 2 ) geographic places, and ( 3 ) places in client perceptual infinite ( Lieberman, M. , 2005 ) . For illustration, when a merchandise requires certain natural resources, a first-moving organisation may be able to derive control over their supply ( Lieberman and Montgomery, 1988 ) . On the distribution terminal, organisations may be able to procure major sites. Dos Santos and Peffers ( 1995 ) exemplify this with Bankss, where early traveling Bankss got the best sites for their hard currency dispensers. An illustration towards the nomadic phone industry would be a shortage in screens. Because of the temblor in Japan, many makers have jobs with the supply of nomadic phone screens. Other comparable assets that may be pre-empted by first movers may merely back up to derive and prolong an advantage in limited conditions. These contain geographic infinite and investment in workss to seek to make economic systems of graduated table ( Lieberman & A ; Montgomery, 1988 ) .
First movers can derive an advantage through sustainable leading in engineering ( Lieberman and Montgomery, 1988 ) . Technological leading is an indicant of the cognition and expertness of the first mover, learned from research & A ; development and other activities ( Cho et al. , 1998 ) . The literature provides two mechanisms in which advantages can be derived. First, larning effects. Learning effects exist if it takes clip for an organisation to larn to utilize a new plus decently, so it is difficult for ulterior entrants to copy ( Dos Santos and Peffers, 1995, Lieberman & A ; Montgomery, 1988 ) . These effects can be described by larning curves that show how effects of new engineerings change over clip. A steep acquisition curve enables a first mover to derive important advantage over later entrants ( Cho et. al. , 1998 ) . In add-on, accumulated experience in downstream activities can offer of import benefits to early movers. The first mover will hold a cost advantage, unless ulterior entrants larn how they can bring forth the merchandise at a lower monetary value than the first mover did. “ Porter discusses how Procter & A ; Gamble developed an advantage in disposable nappies in the United States. However, research workers have found that in most industries it is comparatively easy for ulterior entrants to larn new engineering rapidly and get the better of the lead held by the first-mover house ” ( Reference for Business, N.D. ) .
The 2nd mechanism which can be derived from technological leading is obtaining patents or trade secrets, which will be kept by the first mover. In the nomadic phone industry, patents appear to protect first mover advantages. However, I think that other nomadic phone manufacturers can contrive their ain engineering rather fast, so that the protection of the first mover ‘s innovation can be bypassed rapidly plenty. A stronger advantage from leading occurs when the first mover can set up their merchandise as the industry criterion, doing it more hard for ulterior entrants to derive client credence ( Reference for Business, N.D. ) . Organizations that enter a market could be able to larn about their possible client base and be able to better market and sell to clients. This may be peculiarly true when come ining foreign markets ( Cho et al. , 1998 )
The behaviour of purchasers constitute of chances for the first mover to accomplish a distinction advantage or a cost advantage to be endowed in the first/mover by the market place ( Kerin, Varadarajan and Peterson, 1992 ) . Before ulterior entrants enter, first movers have a monopoly over what consumers see and learn ( Dos Santos & A ; Peffers, 1995 ) . Organizations are deriving experience and asymmetric information about the client, organize client acquisition, and create exchanging costs ( Kerin, Varadarajan and Peterson, 1992 ) . Switch overing costs provide inducements for an established relationship to go on. An illustration in relation to the nomadic phone industry is that application shops of makers sell applications that will merely work on their operating system. Apple did so with the iPhone. In this instance, applications that clients bought would merely work on Io, the operating system for iPhones. Apple built their image early with clients, and educated the clients on what a smartphone should be in general, so that they think that what the first mover offers is what the merchandise should be like ( Bohlmann et al. , 2002 ; Brown & A ; Lattin,1994 ) . Furthermore, clients do non experience to seek ulterior entrants, since they are non familiar with these merchandises ( Bohlmann et al. , 2002 ) . Later entrants have to pass more resources than first movers to pull clients on the evidences of the purchaser shift costs.
Despite many benefits that first-movers could develop, there are besides possible disadvantages every bit good. Later entrants do non hold to do all of the investings that the first-movers had to do. They can “ free-ride ” on what the first-mover already did ( Lieberman and Montgomery, 1988 ; Cho, Kim and Rhee, 1998 ) . An illustration to exemplify this disadvantage could be a first-mover that invested a batch of money in the development of merchandise X. After the debut on the market, a late-mover could easy copy the merchandise alternatively of developing a new merchandise, therefore the investing is lower. Furthermore, when the applied engineerings are improved an dispersed, they become less expensive and even more efficient, which enables late-movers to accommodate such engineerings and do cheaper merchandises ( Bohlmann, Golder and Mitra, 2002 ) . Another benefit for late-movers is that they can derive from the actions of the first-mover in that they already cultivated the clients and opened up distribution channels ( Cho, Kim and Rhee, 1998 ) .
Followings besides face fewer uncertainnesss than first-movers face. Before Apple launched the iPad, Apple faced uncertainness for the demand of the merchandise, because the merchandise was unknown. Later entrants may hold more penetrations in the demand for such a merchandise after it is introduced to the clients. In effect, first-movers are likely to do errors in positioning the merchandise or skip features clients ‘ desire. Later entrants can larn from these errors and accommodate their scheme and/or merchandise to fulfill the desires of clients ( Lieberman & A ; Montgomery, 1988 ) .
Inactiveness can be another job for first movers ( Lieberman & A ; Montgomery, 1988 ) . First-movers could non be able or willing to maintain up with the switching demands of clients or can be burdened with out-of-date resources. Subsequently entrants have the possibility to vie with superior resources and that inertial forces prevent first movers from achieving these resources ( Cho, Kim and Rhee, 1998 ) .
First mover advantages
Late mover advantages
Proprietary, technological leading
Opportunity to liberate drive
Preemtion of scarce resources
Resolution of technological and market uncertainness
Constitution of entry barriers
First mover ‘s trouble to accommodate to market alterations
Avoidance of clang with dominant houses at place
Relationships and connexions with cardinal stakeholders such as authoritiess and clients
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