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James Graham
It is Good to be First to
Market; True or False?
Speaker Introduction
2
12 years management in
multinational companies
Consulting since 1993
Global Experience
Change Speci...
Agenda
1
• Background and context – what is ‘First Mover Advantage?’
2
• Case study – when first mover advantage was succe...
Definition of First Mover Advantage
“Competitive advantage arising
from being the first player to enter a
new market or in...
Blue Oceans
A Blue Ocean is
a market without
viable
competition
First mover
advantage might
create a Blue
Ocean (e.g.
Coca...
Case Study #1 – Coca Cola®
Beverage
Invented in 1886, by John S Pemberton
Pepsi Cola® launched 12 years later
Coca Cola® w...
Cola Market Shares (USA)
http://www.businessinsider.com/soda-wars-coca-cola-pepsi-history-infographic-2011-11?op=1&IR=T
42...
Why Did Coca Cola® Succeed?
Product remains unchanged (New Coke®
introduced and withdrawn)
Pepsi Cola® beats Coca Cola® in...
Case Study #2 – Sony
DataDiscman®
eBooks had been around for over a
decade, but relied on desktop equipment
DataDiscman® l...
Why Did Sony Fail?
Sony focused on creating great technology
The company used proprietary DRM
This limited the number of t...
Technology Velocity
Market Velocity
The Five Forces & Two Velocities
Industry
Competitors
Potential
Entrants
Buyers
Substi...
Red Ocean Blue Ocean
Entry and Exit Timing is Crucial
Time
Key
Breakeven Revenues
Make Profit &
Withdraw
Loss Making
12
Building Barriers
Achieving (and maintaining) a
technical edge
Dominating scarce assets
Building a loyal customer base
13
Examples of Building Barriers
Volvo cars – safety advances
De Beers – diamonds (sells ~ one
third of all diamonds)
Loyal c...
Four Routes to Competitive Advantage
Route I
•Understand the Key
Success factors
•Focus on differentiating
functional capa...
High Serious Entry into Market
Opportunistic position to test
growth prospects; withdraw if
indications of sustainable
gro...
First Mover Advantage Assessment
Likely
If the product/service is stable
and does not change quickly
If the market require...
Conclusions
First mover advantage
is not guaranteed
• Being first to market
may need a lot of
financial strength
• Sometim...
Any Questions?
19
Future Events with James Graham
Dates Seminar Location
31 Jan-4 Feb 2016 Certificate in Data
Analysis Skills
Dubai
24-27 A...
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Webinar: It Is Good To Be First To Market - True or False

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To view recording: https://youtu.be/btV138SXqHo or watch the video at end of the slide

Listening to many people, you would think that being first to market always guarantees success, but is that true?

The webinar presenter, James Graham, will take you through the evidence for and against this concept and show a simple assessment framework that you can use as part of your toolset when developing strategy.

At the end of the webinar, you will be able to look at the context, variables and constraints for each situation, making your own choice of whether you wish to take a ‘bleeding edge’, ‘leading edge’ or ‘trailing edge’ position.

James is a consultant who specialises in the formulation and execution of strategy and he has worked in the region for over 10 years, assisting private and public sector organisations.

During the webinar, James will cover the specific points below and also answer questions that arise.

• Background and context – what is ‘first mover advantage?’
• Case study – when first mover advantage was successful
• Case study – when being first was a failure
• Conclusion on case studies
• A framework to assess what position to take
• Q&A

About the Presenter:
James Graham specialises in strategy formulation and strategic execution, with the experience of working in over 30 countries across Africa, The Americas, Asia, Europe and the Middle East.

Published in: Education
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Webinar: It Is Good To Be First To Market - True or False

  1. 1. James Graham It is Good to be First to Market; True or False?
  2. 2. Speaker Introduction 2 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. 3. Agenda 1 • 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 3
  4. 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” 4
  5. 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 5
  6. 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 6
  7. 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 7
  8. 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 8
  9. 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 9
  10. 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 10
  11. 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. 12. Red Ocean Blue Ocean Entry and Exit Timing is Crucial Time Key Breakeven Revenues Make Profit & Withdraw Loss Making 12
  13. 13. Building Barriers Achieving (and maintaining) a technical edge Dominating scarce assets Building a loyal customer base 13
  14. 14. Examples of Building Barriers Volvo cars – safety advances De Beers – diamonds (sells ~ one third of all diamonds) Loyal customer base – Apple® 14
  15. 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 15
  16. 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 16
  17. 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 17
  18. 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 18
  19. 19. Any Questions? 19
  20. 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 20

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