Competitive Strategies
The first-mover strategy is entry to the market by taking the lead in terms of the introduction of a specific product to the market having a competitive advantage. While it involves the initial purchase of resources and capture of loyalty in the market, challenges like high-cost risks due to new emerging problems, present themselves since there is minimal research done on the new market. An excellent example of a company that implemented this strategy is Starbucks.
Another competitive strategy that companies can adopt is the first follower strategy. This strategy involves the replication of an invention. Companies utilizing this strategy are the first to copy a product or service that another company already offers and improve and localize it in an area that has never heard of the product or service before. An example of a company that mastered this strategy is Facebook, who borrowed ideas from Myspace.
Reasoning Behind Implementation of the Strategy
According to Lee & Kim (2018), Starbucks used the first-mover strategy by establishing stations in central areas where its customers could still get coffee if they are not at home or their offices. Within 25 years, the company had characterised its brand by purchasing the world’s most renowned and high-quality arabica coffee and used the most effective, efficient, and presentable kitchen equipment, leaving its competitors in the dust. By adopting the best resources and improving its services where needed, Starbucks gained a competitive advantage against its competitors.
Facebook’s CEO launched the app about five months after Myspace had taken over in 2003. Facebook joined the social network by borrowing some ideas from Myspace and later improved its app by adding Application Programming Interface (API), which allowed access to data on apps, disrupting the status quo in the social media market. After a few months, Myspace gradually fell in rankings as a result of Facebook’s strategy.
Results achieved with the strategy
The first-mover strategy used by Starbucks also functioned as a marketing strategy. The brand distinctively differentiated itself and its products from other coffee shops. By addressing the niche of affordable and accessible coffee stations in the city, Starbucks’ profits skyrocketed, and they gradually continue to rise.
As a first follower strategy company, Facebook surpassed its competitors and became dominant in the market. Over the years, the services rendered by the application have expanded and improved, offering additional features like live streaming. The strategy established Facebook as the number one social media application in the world.
References
Lee, J., & Kim, Y. (2018). “A Newcomer” versus “First Mover”: Retail Location Strategy for Differentiation. The Professional Geographer, 70(1), 22-33.
Jung, G., & Lee, B. (2011, July). How Did Facebook Outspace Myspace With Open Innovation? An Analysis Of Network Competition With Changes Of Network Topology. In PACIS (p. 88).