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1. FOLLOWER / LATECOMER
STRATEGY
SUPREME X

2. WHAT IS FOLLOWER STRATEGY?
• Strategy of product imitation / copy.
• Involves taking a 'wait and see' approach, rather than perceiving
innovate on as a race in which being first to market is critical.
• When it becomes clear that there is high level of consumer acceptance
in market or number of competing designs begins to diminish, then
and only then does latecomer enter the market.

3. Cont’d.
• The innovator bears the expense of developing the new product,
bringing in the technology, breaking entry barriers and educating the
market.
• However, follower can come along and copy or improve on the new
product.

4. WHAT IS THE ADVANTAGE OF THE
STRATEGY?
• 'Free rider effect‘
- Latecomer is able to utilize benefit of investments made by pioneer firms.
- Can achieve higher profits since it did not bear the innovation expense.
- Since customers are already aware of the product, the cost of educating the
market is not required.

5. Cont’d
• 'Info spill-over effect‘
- Arise where diffusion of technologies over time results in reduced r&d
costs for latecomers.
- Latecomers will be able to access the information once in public
domain without having to undertake major r&d and expenditure. Gives
latecomer a cost advantage over pioneer firms.

6. Cont’d
• Learning effects‘
- Latecomers are able to learn from the mistakes and failures of others.
- If problems associated with tech becomes more widely known and
uncertainty reduces, so scope for learning becomes much greater.

7. WHAT IS THE DISADVANTAGE OF THE
STRATEGY?
• Reward of all the work given to the market leader.
• It takes time to overtake the leader.
• The follower is often a major target of attack by challengers, it must
keep its manufacturing costs low and its product quality and services
high.
• Little innovation is needed to improve the product which can lead to
increase in manufacturing cost.

8. WHAT COMPANY USE THIS STRATEGY?
• Wireless tech from Nintendo Wii, which was imitated over time and improved on by
Microsoft Xbox.
• Chinese market which supplies imitation goods of branded products at throwaway
prices.
• Facebook 'followed' Myspace, Hi5, Orkut etc. Zynga also entered and captured an
existing market.