First-mover advantage

Before we get to the basics, let’s acknowledge that “the Advantage” belongs to apple. Through history, apple dominates. The Apple of Adam & Eve, the Apple of Isaac Newton, the Apple of William Tell, and now the Apple of Steve Jobs. Apricots, oranges and bananas have been relegated to the sidelines of history, so to speak.

In the corporate world, first-mover advantage refers to the competitive edge gained by an enterprise that pioneers a certain market or industry. This advantage can manifest in various forms, including the benefits of being the first mover.

Brand recognition & loyalty. First movers can establish strong brand recognition and customer loyalty, making it challenging for later entrants.

• Setting industry standards. By being the first to market, it can shape industry standards, and influence customer expectations.

• Technological leadership. First movers can gain a technological advantage edge, making it difficult for competitors to catch up.

• Control of resources. First movers can secure strategic resources such as prime locations, talented employees, or supply chain advantages.

Some examples:

• Tibet Cosmetics– First cosmetic group in Pakistan; it dominated the market in early years.

• Packages Ltd, Lahore. It was the first mover in the packaging sector, especially liquid packaging. Competitors have emerged, but the company holds its leadership role.

• There are companies in Pakistan dating back to the 19th century. For many years they held on to the first-mover advantage, e.g., Murree Brewery, Mitchell’s Fruit Farms, and the Moosajees (the tailoring establishment in Karachi).

Procter and Gamble (PG) is an MNC that owns over a dozen billion brands. PG launched the Pampers (baby diapers) in Pakistan many years ago. Once the market was primed, other cheaper products moved in.

The drawbacks of being a first mover

• High failure rate

• Imitation & competition

• Rapid technological innovation

Only 10 percent of the new products survive. The failure rate is high. If the company does not have deep pockets, it may not be able to take a hit. In the high tech industry, it’s best to leave it to the giants. The technology is changing on a daily basis and only the tech giants can handle it. There is a classic case in Pakistan- two mobile phone licences were issued in the late 1980s. Because of the heavy investments required, the two companies were assured that no further competition would be allowed. This GOP assurance was voided, leading to certain anomalies in the industry. Within the FMCG industry, new products are launched, fast & furious. Approx 85 percent fail. Here are some historical examples, which are worth studying by corporate gurus:

• New Coke. It was a dismal failure; in fact, one of the largest failures in current marketing history.

• Sony Betamax. A technology choice gamble. Sony lost out big time.

• Maxwell House Instant Coffee. Who wants to consume “ready-to-drink coffee”? The fun is in the making and brewing.

• Harley Davidson perfume. Can you believe Harley Davidson launched a perfume, which ‘died’ soon thereafter? The biker gangs are known for their rough and aggressive optics. Launching a perfume.

Pond’s toothpaste. The soothing Pond’s cream. Four generations of ladies swore by Pond’s’ cream. A toothpaste was launched only to find “zero” response.

First-mover advantage helps. It lasts for a while. Then competitors and technology overwhelm.

Copyright Business Recorder, 2025