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first-mover advantage


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The first significant company to enter a new market in a substantial way, often with a new service or product that has no previous track record. First-mover advantage was initially thought to be a crucial and necessary marketing strategy in the Internet economy, but experience has now shown that this has not always been the case. First-mover advantage can be instrumental in building market share, but the early years of the Internet economy have not shown conclusively that this leads to business success. eBay and Amazon.com are examples of online companies that have gained successful early-mover advantage. There is no single reward for early movers. Some industries reward first movers with near-monopoly status and higher margins. Other industries do not necessarily reward the first mover, allowing late movers the chance to compete more effectively and efficiently against early entrants.

Subjects: Marketing.


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