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a new market, such as Gillette, the
men’s grooming business, with its
long-held policy to be the “first to
get it right.” Some companies
choose not to do this; Samsung, for
example, aims to be a fast follower,
having learned from competitors.
First-mover advantage
Being first to market gives a
company “first-mover advantage,”
which can be long-lasting or
short-lived. Long-term advantage
brings durable benefits, either by
creating an entirely new market,
or by improving a company’s
market share over a long period.
Companies that succeed in
building long-term advantage
often dominate their product
categories for many years. Hoover
and Post-it Notes, for example,
were so successful in their market
sectors that their brand names
have become generic terms.
Short-term advantage typically
occurs because it is based on new
technology. Today, innovation is
exceptionally fast in many sectors,
with increasingly shorter gaps
between new introductions and
superior products. Sony is one
example of a technology company
that led the market for around 20
years, until competition from new
technology arrived.
Sony’s corporate philosophy is
built on “doing things that no one
else is willing to do.” The business
was set up in the ruins of Tokyo
after World War II, and the founder
Ibuka Masaru was determined to
develop leading-edge products and
get them to market faster than the
competition. This idea became a
personal obsession for Ibuka and
his successor, Morita Akio.LEADING THE MARKET
Yarn spinning was the first activity to
become entirely mechanized. The British
government restricted export of this
technology, maintaining its first-mover
advantage for as long as possible.In 1979 Sony introduced the Sony
Walkman, the first portable music-
listening device. Just as Ford had
changed the way people traveled,
Sony changed music-listening
habits—and lifestyles. Its launch
coincided with the aerobics craze,
and millions used the Walkman
to add music to their exercise
workouts. Between 1987 and 1997,
the height of the Walkman’s
popularity, the number of people
starting to walk as exercise
increased by 30 percent, according
to Time magazine. Sony sold 200
million of their portable cassette
players, and by 1986 the word
“Walkman” had entered the Oxford
English Dictionary.
The Walkman evolved from
cassette to CD technology, and
consumers were happy with their
portable music players until 2001,
when Apple CEO Steve Jobs said:
“The coolest thing about the iPod
is that your whole music library fits
in your pocket.” So began a new
industry, based on portable digital
music, and dominated by market-
leader Apple.Being first is everything
Leading the way often depends
on the product being embraced by
“early adopters”—consumers who
are willing to pay a price premium
to be the first to own something.
This happened with the launch of
Apple’s iPhone in the summer of- Even though the price was
reduced a few months after launch,
those who had bought at the higher
launch price did not resent it due to
the cachet of being at the forefront
of the latest trends and fashion.
It’s not the consumers’
job to know what
they want.
Steve Jobs
US former CEO of Apple (1955 –2011)