Early Mover Advantage:

Early mover advantage, or first-mover advantage, is a competitive advantage that comes to a company when it becomes the first to penetrate a new market or launch a new product or service. It gives the firm the opportunity to create brand recognition, set consumer tastes, and even set the industry standard. But this move also has dangers, including high start-up expenses and the threat that competitors will learn from the blunders of the first mover.
Here is a more specific analysis:
Advantages of Being the First Mover:
Brand Identification and Affinity:
Being early can result in high brand identification and customer affinity because the firm becomes the first choice in the emerging market.
Establishing Standards:
The first mover has the capability to establish the product class and set the benchmark for subsequent players.
Relationship Building:
Early mover gives the firm the ability to establish relationships with strategic suppliers and retailers.
Economies of Scale:
Early movers have the potential to gain economies of scale by making at a higher volume, which will provide them with a lower cost.
Control of Resources:
Early movers might win access to scarce resources or strategic sites, leaving others with no way of entering.
Technology Leadership:
The first mover might gain a technological leadership through patents, secrecy, or learning-curve benefits.
Possible Disadvantages of Early Mover Advantage:
High Initial Costs:
Entering a new market usually requires major research and development, marketing, and infrastructure expenses.
Uncertainty:
The market can be undeveloped, which means high uncertainty regarding consumer tastes and possible demand.
Risk of Imitation:
Others can learn from the initial mover’s failure and create better products or services.
Changing Technology:
Technological changes can make the initial mover’s technology outdated.
Late movers may occasionally be aided by disruptive innovations that make the first mover’s product less applicable.
Examples:
Amazon:
Amazon’s early move into internet retailing enabled it to gain an overwhelming lead and create a huge customer base.
Google:
Google’s early leadership in search enabled it to create a strong brand and take a massive chunk of the online advertising market.