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significant. They give the example
of the market for vacuum cleaners,
and, in particular, of the long-term
market leader, Hoover. Until the
relatively recent introduction of
Dyson cleaners, the market was
benign and technological
advancement slow. Having been
first to market in 1908, Hoover
enjoyed several decades of
advantage—an advantage that
was (and, in some places, still is)
reflected in the widespread use of
the company’s brand name as the
verb “to hoover.”
In other industries, however,
where technological change or
market evolution is rapid, first-
movers are often at a disadvantage.
The first search engines are
examples of businesses that had
too much invested in early
iterations of a technology to keep
up with the rapid pace of change.
Early advantage quickly
becomes obsolete in changeable
markets. As the market evolves,
later entrants are those that seem
to be cutting edge, offering
innovative features that build on
the market-knowledge as well as
learning from the mistakes of the
first-mover. The first-mover may
have enjoyed short-lived advantage
but in dynamic markets such an
advantage is rarely durable. Even
Apple, who enjoyed significant
early-entrant advantage in the
smartphone market with the
iPhone, is not immune from first-
mover disadvantage. Competitors,
Samsung in particular, were able
to listen to customer complaints
about iPhones, analyze customer
needs, and produce products with
features and functionality welcomed
by the market. Apple, locked into
previous technology iterations, took
time to react and iPhone sales
suffered as a result.Customer needs
To gain an edge, therefore, you do
not always need to be first. Indeed,
US multinational Procter & Gamble,
for example, prefers only to enter
those markets in which it can
establish a strong number one or
number two position over the long-
term—rarely is this achieved in a
blind rush to be first.
Procter & Gamble seeks
markets that are demographically
and structurally attractive, with
lower capital requirements, and
higher margins. But mostGAINING AN EDGE
The PalmPilot, launched in 1997, was
a successful fast-follower product. It
followed Apple’s unsuccessful Newton,
which was the first personal digital
assistant (PDA) to enter the market.importantly, the organization
insists on a deep understanding of
customer needs in any market they
enter. In other words, they would
rather enter mature markets than
be first into new ones.
The company values long-term
relationships with its customers
and suppliers; its view of innovation
is different from small companies
who, in attempting to capture
market share, strive to gain an
edge through the introduction of
disruptive technology—innovative
technology that seeks to destabilize
the existing market. Procter &
Gamble, perhaps heeding the
research, considers such strategies
to be short-lived. They realize that
overly rapid innovation runs the risk
of cannibalizing their own sales
and reducing the returns on new
product investment. In the market
for disposable baby diapers, for
example, Procter & Gamble was
more than ten years behind the first
mover. The company’s now famous
Pampers brand was launched in
1961, following some way behind
Johnson & Johnson’s Chux brand,If you do things well,
do them better.
Anita Roddick
UK entrepreneur (1942–2007)