A gradual pace of change in technology makes it hard for later entrants to differentiate their products from those of the first entrant. So, ‘to Hoover’, ‘To Uber’, ‘To Xerox’, ‘To Google’ shows advantage ingrained into activity. If the pioneering brand becomes a reference point within the category and transforms into a verb, it is a sure shot sign of advantage. Storied brands such as Nokia, Hindustan Motors Ambassador, Premier Padmini, Dyonara, BPL, Onida are amongst examples of wasted advantage in India.Ī gradual evolution in both technology and markets is the best case scenario for first movers. We have seen this in the case of cellular telephony, automobiles, memory, semiconductor devices, video projection technologies and other markets. The wider the departure from existing products or categories, the more uncertain the future. Their ability to make an entry rides on new technological advantage. It is seen that new entrants tend to drive technological progress. Even with large R&D budgets the incumbents often lose out. The quicker and more disruptive the advancement of technology, less possible it is for the entrenched player to control it. The underlying factors that make or break an advantage are the speed of technology evolution and the pace of market evolution. ‘Being first’ matters but ‘being better’ matters more.
It is true for traditional verticals and new segments as much. Google search was preceded by AltaVista and Lycos. Brands get a foothold, grow to leadership positions and still lose out - Rasna, HMT, Cibaca, Dalda, Godrej Storwel are category building examples from India. Netscape, the first mover, lost its market share to Microsoft’s Internet Explorer within a few years in the 1990s to be in turn challenged by Chrome. It may even involve much greater risk than being an early follower. Early players get more social esteem, reputation and longer term loyaltyīut being first, by itself, isn’t a guarantee of success. Such an early entrenched brand can make investments to pre-empt the aggression of later arrivals.
He who arrives early owns the battle field and waits for the later challenger. Its strengths in distribution and its portfolio of brands in each category allowed it to build dominant positions. Unilever was a pioneer in India with its ‘Indian-isation’ of management. In diverse international markets, skills and resources are better developed. One can tie up key source materials, distribution channels and own consumer mindshare. In India, Royal Enfield is a unique example of longevity, constant growth and brand mystique and appeal that has grown from its first mover days.Įarly entry gives cost advantages associated with operating, manufacturing and selling. Some well-known first movers, such as Gillette in men’s grooming, Kleenex in tissue, Xerox in copiers, Coca-Cola in soft drinks and Hoover in vacuum cleaners unmistakably demonstrate both the value and longevity of early success. The brand creates its own market, gets consumer traction and has a significant lead time for innovations. Significant payoffs exist when one can create barriers to entry. The first mover locks in the standards and makes the market behave in ways that favour it.
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