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The Real Truth About The First To Market Strategy

Krithic Annamalai
I. M. H. O.

The first to market strategy is a misguided belief that being first in the market gives you a competitive advantage in business. Being first does not necessarily ensure that you will dominate the market. Although, if you’re able to find a way of providing value with careful execution then being the first-to-market is a great company strategy for success.

Timing is essential in the business world and releasing a valuable product before anyone else seems like the smartest way to secure your dominance in the marketplace. The key is to figure out the right time. Before you can do that, you’ll need to find the potential advantages and disadvantages associated with being the first to market.

Here are the clear-cut advantages:

Consumer Impact – First movers make a big impact in the minds of consumers, they set a standard for those behind them. Characteristics, delivery methods, price points and other business factors combine a certain level of expectation that you can define to strengthen your company brand.

Name Recognition – If you are the first to pioneer into a certain market, you will surely experience an exclusive sort of name recognition during the beginning stages of the product’s life. Your goal during this time should be to maintain a strong market presence; your name will continue to be identified with the product even after others have joined the market.

Lack of Competition – This is the obvious, and being the first in the mark allows you to have exclusive market rights. You’ll be able to leverage your temporary position as the main provider, and you can make significant gains in the short term, as well as plot a strategy to continue remaining competitive when the market gets crowded.

Netflix and Apple’s App Store are good examples of companies who carried out this strategy successfully.

Here are the disadvantages of being first to market:

Market Ignorance – when you create a new product, you are essentially creating a whole new market. As a first timer, the new market will be shouldered on your company. Your company will be expected to introduce the product and educate consumers about its value. This translates into a lot of time, effort and resources that your competitors don’t have to worry about.

Product Development – First timers also absorb the cost of developing a product to the point of marketability. This might not be an issue for all companies, but for complex products, it’s going to require some serious consideration. Your goal should be to create a timeless market presence.

Cheap Knockoffs – If your product turns out to be a success, you can bet that someone else is going to try and steal it by offering an even cheaper alternative. You want to avoid being priced out by someone else who hasn’t invested anything in your product’s design or development.

Friendster, Netscape and Atari are notable companies who lost in the market to those who entered after them.

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Krithic Annamalai
Krithic Annamalai

Written by Krithic Annamalai

Ask me anything and I'll tell you the answer. If not, I'll just respond cleverly!

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