Question

1. What are first-mover advantages? Discuss these advantages.

2.  Explain the idea of a turnkey project. Why should a firm use this arrangement to expand internationally? In what industries are turnkey arrangements most common?

Answer 1

1.

The first mover refers to those companies that launch a product or service in the market very first and are followed by their competitors. There are several advantages to being the first mover. Some of these advantages are as follows:

Brand image- the first mover, gain the most competitive advantage by obtaining the attention of the potential customers and thus make a sharp brand image among customers and gain their loyalty.

Technology leadership- the first mover, always use the latest technology trend in its products or service, and these technologies are followed by their competitors. Thus it is considered a technology leader.

Having potential resources- they are often in favor of controlling the resource such as a suitable location, establishing the premium contract with potential and key suppliers, and recruiting talented and skilled employees at first.

Switching cost- the first mover always has the advantage of the buyer switching cost. If the first-mover company establishes itself in the market first, it could hardly be convenient for any customers to switch to a new brand.

Amazon and eBay are an example of the first mover.