1.Explain what are the potential advantages of first movers (FMA) and what are t
ID: 383915 • Letter: 1
Question
1.Explain what are the potential advantages of first movers (FMA) and what are the potential disadvantages of first movers (FMD). Provide an example to illustrate either FMA or FMD.
2.Choose one from the following four acquisition cases that we discussed in class and identify the specific aspects of potential synergies.
Amazon acquired Whole Food.
Amazon acquired Kiva System.
Apple acquired Beats Music and Beats Electronics.
CVS acquired Aetna.
Intel acquired Mobileye.
3.Based on 7-S model analysis, which aspect from 7“S” that you think has the potential to be improved? What are your specific recommendations for improving the competitiveness of your project company over the next 12 months?
Explanation / Answer
1.
The first movers in the market hold certain advantages. The first advantage is the untapped market that can be fully served by the first mover company. It gives the benefits of increasing the market share quickly and build a strong branding and value proposition among the target audience. The second advantage is the power of negotiation with the government that goes with the company when it is the first mover. Hence, the company can gain significantly in terms of the tax incentives, land at suitable locations and other benefits. The third advantage is the absence of competitors and big demand and supply gap to cater. Besides, the company can set the highest benchmark for the industry. The fourth advantage is to set up economy of scale that becomes the entry barriers for other players.
Though there are certain disadvantages also. The first disadvantage is the building of the market in terms of the awareness, education, and taste and preferences so that people will buy the product. The second disadvantage is the lack of availability of the suitable infrastructure, skilled manpower in the local market. It will make it difficult for the first mover company to work and expand in the new market. The third disadvantage is the uncertainty held by the new market as it can be of huge risk to the new mover company.
An example of the first mover advantage can be drawn from the launch of iPhone by Apple that defined the smartphone industry with its sophisticated features and apple play store. By the launch of the iPhone, the company introduced the smartphone that can use apps from the play store and can give an unparalleled experience to the consumers. It creates a blue ocean market where no other company was present as the true competitor in the app based smartphone industry. As a result, the iPhone captured the market quickly who could afford to buy it and built a high value proposition among the target audience.
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