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Explain Contrast Between a First-Mover Advantage and a Second-Mover Advantage

Essay by   •  February 23, 2017  •  Book/Movie Report  •  360 Words (2 Pages)  •  1,375 Views

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1. What are the major components of a comprehensive feasibility analysis?

Product/Service Feasibility

Industry/Target market Feasibility

Organizational Feasibility

Financial Feasibility

2. Explain contrast between a first-mover advantage and a second-mover advantage

First-mover advantage is the advantage gained by the initial ("first-moving") significant occupant of a market segment. It may be also referred to as Technological Leadership.

A market participant has first-mover advantage if it is the first entrant and gains a competitive advantage through control of resources. With this advantage, first-movers can be rewarded with huge profit margins and a monopoly-like status.

 Second-mover advantage occurs when a firm following the lead of the first-mover is actually able to capture greater market share, despite having entered late.

First-mover firms often face high research and development costs, and the marketing costs necessary to educate the public about a new type of product. A second-mover firm can learn from the experiences of the first mover firm, and may not face such high research and development costs, if it is able create its own version of a product using existing technology. A second-mover firm also does not face the marketing task of having to educate the public about the new project because the first-mover has already done so. As a result, the second-mover can use its resources to focus on making a superior product or out-marketing the first-mover.

Often second-movers are able to overwhelm first-movers by taking the first-mover's product from a niche consumer market to a mass market. While firms may enjoy a first-mover advantage if they jump out to an early lead and hold onto it, the notion that winners are always the first to enter the market is a misconception.

3. Comment on the following statement: The executive summary is an introduction or preface to the business plan, and as such, is not a very important section of the plan.

This statement is not true. The executive summary is not an introduction, in fact, it is meant to be a summary of the plan itself. In addition, it is arguably the most important section of the business plan because if the executive summary fails to arouse the reader's interest, he or she is unlikely to read the remainder of the plan.



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