1.
James Graham
It is Good to be First to
Market; True or False?

2.
Speaker Introduction
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12 years management in
multinational companies
Consulting since 1993
Global Experience
Change Specialist
12 years senior management
in multinational companies
Consulting since 1993
Global Experience
Specialises in Strategy
Formulation and Execution

3.
Agenda
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• Background and context – what is ‘First Mover Advantage?’
2
• Case study – when first mover advantage was successful
3
• Case study – when first mover advantage was a failure
4
• Case study conclusions
5
• A framework to assess what position to take
6
• Q&A
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4.
Definition of First Mover Advantage
“Competitive advantage arising
from being the first player to enter a
new market or industry”
Quick Poll – “Do you think that
being first to market is always an
advantage”
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5.
Blue Oceans
A Blue Ocean is
a market without
viable
competition
First mover
advantage might
create a Blue
Ocean (e.g.
Coca Cola® had
13 years without
major
competition)
Blue Oceans can
quickly become
highly
competitive Red
Oceans, if the
original firm
cannot build
barriers to new
entrants
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6.
Case Study #1 – Coca Cola®
Beverage
Invented in 1886, by John S Pemberton
Pepsi Cola® launched 12 years later
Coca Cola® was selling over 3.5 million
litres when Pepsi Cola® entered the market
Coca Cola® brand valued at $79m in 2014
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7.
Cola Market Shares (USA)
http://www.businessinsider.com/soda-wars-coca-cola-pepsi-history-infographic-2011-11?op=1&IR=T
42%
31%
27%
Market Share
Coca Cola®
Pepsi Cola®
Others
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8.
Why Did Coca Cola® Succeed?
Product remains unchanged (New Coke®
introduced and withdrawn)
Pepsi Cola® beats Coca Cola® in a blind
tests, due to sweeter recipe
13 years lead established brand built loyal
customer base
Brand perception is a differentiator – Pepsi
Cola® has never beaten Coca Cola® to be #1
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9.
Case Study #2 – Sony
DataDiscman®
eBooks had been around for over a
decade, but relied on desktop equipment
DataDiscman® launched in1992, beating
the Kindle® by 15 years
It was well ahead of its time
Used optical media and a grayscale
screen
Lead to Sony Librie® , launched 2004, first
e-ink reader
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10.
Why Did Sony Fail?
Sony focused on creating great technology
The company used proprietary DRM
This limited the number of titles available
Users wanted to access a wide range of titles
Sony never provided enough titles
Amazon understood this and launched the Kindle®
with a huge range of titles
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11.
Technology Velocity
Market Velocity
The Five Forces & Two Velocities
Industry
Competitors
Potential
Entrants
Buyers
Substitute
Products
Suppliers
Adapted from Porter, M, 1985, Competitive Advantage: Creating & Sustaining Superior Performance , New York, Macmillan 11

12.
Red Ocean Blue Ocean
Entry and Exit Timing is Crucial
Time
Key
Breakeven Revenues
Make Profit &
Withdraw
Loss Making
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13.
Building Barriers
Achieving (and maintaining) a
technical edge
Dominating scarce assets
Building a loyal customer base
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14.
Examples of Building Barriers
Volvo cars – safety advances
De Beers – diamonds (sells ~ one
third of all diamonds)
Loyal customer base – Apple®
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15.
Four Routes to Competitive Advantage
Route I
•Understand the Key
Success factors
•Focus on differentiating
functional capability
Route III
•Introduce aggressive
new initiatives
•Analyse and challenge
existing assumptions to
modify strategy
Route II
•Aim for relative
superiority
•Exploit competitor
weakness
Route IV
•Exploit strategic
degrees of freedom
•Focus on maximising
user benefit, by
innovating in markets
where no competition
exists
Adapted from Ohmae, K, Mind of the Strategist (The Art of Japanese Business), 1982, Maidenhead, McGraw Hill
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16.
High Serious Entry into Market
Opportunistic position to test
growth prospects; withdraw if
indications of sustainable
growth are lacking
Selective Growth
Select areas where strength
can be maintained and
concentrate investment in
those areas
All-out Struggle
Concentrate entire effort on
maintaining strength; if
necessary, maintain profit
structure by investment
Medium Limited Expansion or
Withdrawal
Look for ways of achieving
expansion without high risk; is
unsuccessful, withdraw before
too deeply involved
Selective Expansion
Concentrate investments and
expand only in areas where
profitability is good and risk is
relatively low
Maintenance of Superiority
Build up ability to counter
competition, avoiding large
scale investment; emphasis
profitability by raising
productivity
Low Loss Minimizing
Prevent losses before they
occur, by avoiding investment
and lowering fixed costs; when
loss is unavoidable, withdraw
Overall Harvesting
Promote switch from fixed to
variable costs; emphasise
profitability through Value
Analysis and Value
Engineering of variable costs
Limited Harvesting
Reduce degree of risk to a
minimum, in several segments
emphasis profit by protecting
profitability even if loss of
market position is involved
Low Medium High
Adapted from Ohmae, K, 1982, Mind of the Strategist (The Art of Japanese Business),, Maidenhead, McGraw Hill
Corporate Strengths
MarketAttractiveness
Specimen Strategies
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17.
First Mover Advantage Assessment
Likely
If the product/service is stable
and does not change quickly
If the market requirement
develops steadily
If a sustainable blue ocean is
probable
If you can build and maintain a
strong brand differentiation
If you have the resources to
develop your product
Unlikely
If the product/service is
vulnerable to disruptive
competition
If the market develops rapidly
If the blue ocean will quickly turn
red
If you lack the financial strength
to build and defend the brand
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18.
Conclusions
First mover advantage
is not guaranteed
• Being first to market
may need a lot of
financial strength
• Sometimes the
second or third to
market wins
• It is easy to create
the market for others
Understanding
customer needs is
paramount
• Customers know
what they want
• Sometimes they don’t
want the best
technology, just the
best product
• The brand is crucial
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19.
Any Questions?
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20.
Future Events with James Graham
Dates Seminar Location
31 Jan-4 Feb 2016 Certificate in Data
Analysis Skills
Dubai
24-27 April 2016 Certificate in Strategic
Thinking and Planning
Dubai
24-27 July 2016 Analysing and
Documenting Policies
And Procedures
Dubai
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