Diskusi bahasa inggris

1. Nama : Neng Haerani Susan Nurani
NIM : 042046776
Diskusi 3. Bahasa Inggris
After studying the third Session Topic entitled 'First Mover Advantage' and also watching a
video on the same topic, answer the following questions:
1.What are the advantages of becoming First Movers in business?
Answer:
First mover advantage is the benefit derived from a firm’s ability to gain early entry into
a new market. Lockheed Martin was the first Western aerospace firm to collaborate with
Russian aerospace companies. Its early technological and partnership advantage allowed it to
secure a leadership position in the global market for commercial space launches, servicing the
satellite industry. Volkswagen moved into the Chinese car industry in the early 1980s and has
secured its position among the leaders in the country’s domestic market. Royal Dutch Shell
was one of the first corporations to extract crude oil in Nigeria in the middle of the last century
and it has retained a dominant position in the country to this day.
Significant payoffs exist when barriers to entry are created. In the early days of the PC
industry, Microsoft created high barriers to entry for computer operating systems by
collaborating with Intel – to make Windows 95 exclusively compatible with Intel x86
microprocessor architecture and vice versa. All PCs produced with the chip came with a
complementary installation of the Windows operating system, which led to an unprecedented
global distribution of the operating system. The media coined the effect the “Wintel
Advantage.” Microsoft still holds a dominant position with 90% market share of the PC
operating system market as at November 2012.
The timing of strategic moves into international markets may be critical for success as a
result of the positive advantages accruing to first movers. The set of advantages to be gained
are as follows:

2. • Cost advantages associated with operating, producing, or retailing in an overseas market.
Early entry can tie up key raw material sources, distribution channels, and other resources.
• Preemption of geographic space such as for key retail locations or international industry
clusters.
• Technological advantages gained by capturing local skills and resources.
• Differentiation advantages obtained from operating in other countries pertaining to variance
in the methods of operation, product, and service offering compares to the host country’s
resources.
• Political advantages gained from a more favorable regulatory environment in the host country.
For first mover advantage, to materialize, it is necessary to
• create high barriers for competitors to enter the market;
• redefine the business to use technology to fundamentally transform the existing way of
operating, usually to provide a superior quality of service at a significantly reduced cost;
• be the first to introduce new systems, including the necessary investment to achieve rapid
growth to preempt the position of any followers;
• exploit first mover advantage to achieve customer loyalty to a brand position, which will
remain after competitors attempt to follow.
Reference:
• Dobrev, S.D. and Gotsopoulos, A. (2010) Legitimacy vacuum, structural imprinting and
the first mover disadvantage. Academy of Management Journal, 53 (5), 1153–1174.
• Frynas, J.G., Mellahi, K. and Pigman, G.A. (2006) First mover advantages in
international business and firm-specific political resources. Strategic Management
Journal, 27 (4), 321–345.
• Porter, M. (1980) Competitive Strategy, The Free Press, New York, pp. 232–233.
• Sammut-Bonnici, T. and McGee, J. (2002) Network strategies for the new economy.
European Business Journal, 14 (1), 174–185.

3. 2. What are the challenges of becoming First Movers?
Answer:
There is no first mover advantage where there are low or zero barriers to entry by
competitors. Being first is no guarantee of success. Indeed, it may involve much greater risk
than being an early follower. For example, first mover advantage did not occur in the internet
browser wars for global dominance in the 1990s. Netscape, which was the first mover, lost its
market share to Internet Explorer within a few years of inception. Internet Explorer’s lead in
global market share is now being challenged by the rapid rise of Chrome.
Sometimes there are even first-mover disadvantages, or advantages enjoyed by companies
who enter later. For example, the first entrant may invest heavily in enticing customers to try a
new type of product. Later entrants would benefit from informed buyers without having to
spend as much on education. Later entrants may be able to avoid mistakes made by the first
movers. If first movers become complacent, later entrants may take advantage of changing
customer needs. As the Internet continues to develop, technology companies find themselves
especially susceptible to second- or later-mover success. Follower companies are reverse-
engineering many new products to develop competing products either faster or cheaper—
negating much of the first-mover advantage.
First mover disadvantages occur when
• skills and know-how of first movers are easy to replicate;
• copying is easy and customer switching costs are low;
• pioneering is expensive and experience effects are low;
• technological change is so rapid that early investments rapidly become obsolete.
Reference:
• Short, J.C. and Payne, G.T. (2008) First movers and performance: Timing is everything.
Academy of Management Review, 33 (1), 267–269.
• Suarez, F.F. and Lanzolla, G. (2008) The role of environmental dynamics in building a
first mover advantage theory. Academy of Management Review, 33 (1), 269–270.

4. 3. What does a First Mover do in order to survive the market?
Answer:
the main elements of the winning business model for first mover are the following:
(1) Target the average consumer (rather than the early adopters) by emphasizing different
product attributes to those that the pioneers focus on. In particular, instead of emphasizing the
functionality of the product, emphasize low prices that help grow the market;
(2) Support low prices by driving down costs. To do so, the winning firms build market share
quickly so as to enjoy economies of scale and learning benefits. This can be achieved by
creating bandwagon effects;
(3) Reduce customer risk through branding and communication. The winning firms help build
as big a consensus as possible across consumers to broaden the initial installed base and widen
the ultimate market;
(4) Build the distribution that can serve the mass market;
(5) Create alliances with key suppliers and producers of complementary goods, so as to control
key inputs and the provision of complementary goods;
(6) Protect the market by exploiting second mover advantages
There may be more actions that the winning firms can take to consolidate the early market. But
the important point to note is that winning the market is not a matter of luck or good intentions.
It is the by-product of an innovative business model.
Reference:
• Markides, C., 1997. Strategic innovation. Sloan Management Review 38 (3 (Spring)),
9e23. Markides, C., 2008. Game Changing Strategies: How to Create Market Space in
Established Industries by Breaking the Rules. Jossey-Bass, San Francisco.
• Markides, C., 2012. How disruptive will innovations from emerging markets be? Sloan
Management Review 54 (1, Fall), 22e25.
• Markides, C., Geroski, P., 2005. Fast Second: How Smart Companies Bypass Radical
Innovation to Enter and Dominate New Markets. Jossey-Bass, San Francisco