After studying the third Session Topic entitled 'First Mover Advantage' and also watching a

video on the same topic, please tell your opinion about the benefits and possible drawbacks of
being the First Movers in business. 

A first mover is a service or product that gains a competitive advantage by being the first to
market with a product or service. Being first typically enables a company to establish strong
brand recognition and customer loyalty before competitors enter the arena. First movers in an
industry are almost always followed by competitors that attempt to capitalize on the first mover's
success and gain market share. Most often, the first mover has established sufficient market share
and a solid enough customer base that it maintains the majority of the market.

A. First Mover Advantages

Being the first to develop and market a product comes with many main advantages that
strengthen the company's position in the market, including :

1. Brand name recognition is the main first-mover advantage. Not only does it engender
loyalty among existing customers, but it also draws new customers to a company's
product, even after other companies have entered the market. Brand name
recognition also positions companies to diversify offerings and services. Examples of
dominant brand name recognition of a first-mover include soft drink colossus Coca-
Cola, auto-additive giant STP, and boxed-cereal titan Kellogg.
2. Economies of scale, particularly those regarding manufacturing or technology-based
products, is a massive advantage for first movers. The first mover in an industry has
a longer learning curve, which frequently enables it to establish a more cost-efficient
means of producing or delivering a product before it competes with other businesses.
3. Switching costs let a first-mover build a strong business foundation. Once a customer
has purchased the first mover's product, switching to a rival product may be cost-
prohibitive. For example, a company using the Windows operating system likely
would not change to another operating system, because of the costs associated with
retraining employees, among other costs.
4. technology leadership, First mover can make it difficult for their
technology/product/service to be imitated by new entrants. For example, if a first
mover can reduce the cost of producing a product Cost of Goods Manufactured
 (COGM) Cost of Goods Manufactured, also known as COGM, is a term used in
managerial accounting that refers to a schedule or statement that shows the total cost
of production for a company over a period of time. certain time. (the "experience"
curve effect), first movers can establish an absolute cost advantage. In addition, filing
a patent can protect and build a first mover advantage.

B. Disadvantages of First Movers

Despite the many advantages associated with being a first mover, there are also
disadvantages, for example :
1. It is highly costly to become the first-mover because the firm has to create demand in
the market for the product and so it needs to spend a huge amount of money for
promotion.
2. It may invite severe adverse effects on operations of the firm if the industry is such
that there are frequent changes in technology (such as in the software industry or the
telecommunications industry). In such a situation, the late-movers gain the advantage
of using the latest technology.
3. The late-movers can copy/imitate the technical-how; easily and eventually may be
able to dust the first-mover from the market.
4. The late-movers may become so powerful because of their ability to bypass the first-
mover in developing skills and techniques that they can snatch-away the customers
of the first-mover.
Sumber
Mardiani. Siti Era. 2020. Bahasa Inggris Niaga. Tangerang Selatan. Universitas Terbuka.