What does first mover advantage mean?
The first-mover advantage refers to an advantage gained by a company that first introduces a product or service to the market. The first-mover advantage enables a company to establish strong brand recognition and product/service loyalty before other entrants to the market.
Advantages of being a first mover.
When a company is a first mover, they tend to enjoy a few benefits related to their positioning and strategy implementation.
First mover companies can Companies that are first movers can often:
- Establish their product as the industry standard.
- Be able to tap into consumers first and make a strong impression, which can lead to brand recognition and brand loyalty.
- May be able to control resources, such as basing themselves in a strategic location, establishing a premium contract with key suppliers, or hiring talented employees.
- Can gain an advantage when there is a high switching cost for consumers to switch to later entrants.
“There is a significant first-mover advantage in Africa, but there are a limited number of deals to be done, and people who come to the table late [won’t find the best pricing],” she says. IHS targets affordable for-sale and rental housing development in South Africa and sub-Saharan Africa.
“There are some very interesting and unexpected opportunities in the market.”
But the rise of institutional-quality real estate assets, combined with the relatively few global managers and investors targeting institutional real estate investment in South Africa and sub-Saharan Africa, makes the region a compelling one for investors, says Soula Proxenos, managing partner at International Housing Solutions (IHS).
TiVo, Redbox, Friendster, and Yahoo are examples of first-mover companies that lost out second-mover companies (i.e cable provider DVR and streaming services, Netflix, Facebook, and Google).
These once-powerful pioneers break down the myth that first to market is always strongest or best.
