The Half Truth About The First Mover Advantage
For the exclusive use of S. BIFOLCO2015.
www.hbr.org
BEST PRACTICE
First-mover advantage is more than a myth but far less than a sure thing. Here’s how to tell when it’s likely to occur—and when it’s not.
The Half-Truth of
First-Mover Advantage by Fernando Suarez and Gianvito Lanzolla
•
Reprint R0504J
This document is authorized for use only by STEPHANIE BIFOLCO in Global Strategy - BMBA1 - Back Bay at Hult International Business School2015.
For the exclusive use of S. BIFOLCO2015.
First-mover advantage is more than a myth but far less than a sure thing. Here’s how to tell when it’s likely to occur—and when it’s not.
BEST PRACTICE
The Half-Truth of
First-Mover Advantage by Fernando Suarez and Gianvito Lanzolla
COPYRIGHT © 2005 HARVARD BUSINESS SCHOOL PUBLISHING CORPORATION. ALL RIGHTS RESERVED.
Some management concepts have such intuitive appeal that their validity is almost taken for granted. First-mover advantage is one such concept. Although the fate of its mostconvinced adherents, the dot-coms, offers a cautionary lesson, managers’ faith that firstmover status brings important competitive advantages, even when network effects are not available to accelerate and entrench it, remains undiminished. Business executives from every kind of company maintain, almost without exception, that early entry into a new industry or product category gives any firm an almost insuperable head start.
But for every academic study proving that first-mover advantages exist, there is a study proving they do not. While some well-known first movers, such as Gillette in safety razors and Sony in personal stereos, have enjoyed considerable success, others, such as Xerox in fax machines and eToys in Internet retailing, have failed. We have found that the differences in outcome are not random—that first-mover status can confer advantages, but it does not do
harvard business review • april 2005
so categorically. Much depends on the circumstances in which it is sought.
One possible
www.hbr.org
BEST PRACTICE
First-mover advantage is more than a myth but far less than a sure thing. Here’s how to tell when it’s likely to occur—and when it’s not.
The Half-Truth of
First-Mover Advantage by Fernando Suarez and Gianvito Lanzolla
•
Reprint R0504J
This document is authorized for use only by STEPHANIE BIFOLCO in Global Strategy - BMBA1 - Back Bay at Hult International Business School2015.
For the exclusive use of S. BIFOLCO2015.
First-mover advantage is more than a myth but far less than a sure thing. Here’s how to tell when it’s likely to occur—and when it’s not.
BEST PRACTICE
The Half-Truth of
First-Mover Advantage by Fernando Suarez and Gianvito Lanzolla
COPYRIGHT © 2005 HARVARD BUSINESS SCHOOL PUBLISHING CORPORATION. ALL RIGHTS RESERVED.
Some management concepts have such intuitive appeal that their validity is almost taken for granted. First-mover advantage is one such concept. Although the fate of its mostconvinced adherents, the dot-coms, offers a cautionary lesson, managers’ faith that firstmover status brings important competitive advantages, even when network effects are not available to accelerate and entrench it, remains undiminished. Business executives from every kind of company maintain, almost without exception, that early entry into a new industry or product category gives any firm an almost insuperable head start.
But for every academic study proving that first-mover advantages exist, there is a study proving they do not. While some well-known first movers, such as Gillette in safety razors and Sony in personal stereos, have enjoyed considerable success, others, such as Xerox in fax machines and eToys in Internet retailing, have failed. We have found that the differences in outcome are not random—that first-mover status can confer advantages, but it does not do
harvard business review • april 2005
so categorically. Much depends on the circumstances in which it is sought.
One possible