The first-mover advantage is the advantage gained by the first significant company to move into a new market. Being the first mover allows a company to capture market share without competition from rivals. Moreover, when competition does appear, the first mover will likely have the advantages that come from customers who are familiar with and loyal to their products.

Nevertheless, there are two obvious drawbacks to being the first mover: cost and risk. Not only is it expensive to be a pioneer, but it is risky, as the first company in a particular market cannot benefit from knowledge of successes and mistakes of others.

Obviously, every market is different. Thus, while some markets may highly reward first movers, others may not.

See also

• Second-mover advantage (aka "fast follower")

References

• The Myth of First-Mover Advantage - An article that discusses whether the First-Mover Advantage always leads to commercial success in the high-tech industry.
• http://www.marketingterms.com/dictionary/first_mover_advantage/
• http://www.ftmastering.com/mmo/mmo07_6.htm

Marketing strategies and paradigmsMarketingStrategic management