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Entrepreneurial strategy. HEMBA February 18, 2012. Basic strategy categories are:. Differentiation Low cost Niche. The “First Mover Advantage”. Conventional wisdom would have us believe that it is always beneficial to be first – first in, first to market, first in class.

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entrepreneurial strategy

Entrepreneurial strategy


February 18, 2012

basic strategy categories are

Basic strategy categories are:


Low cost


the first mover advantage
The “First Mover Advantage”
  • Conventional wisdom would have us believe that it is always beneficial to be first – first in, first to market, first in class.
  • Examples based on the “Jack Welch school of business strategy”
  • The advantages accorded to those who are first to market defines the concept of First Mover Advantage (FMA).
the case for fma supply side
The case for FMA – supply side
  • Creates economies of scale (economic benefits that accrue with increasing volume to both period costs and unit costs of production)
  • Creates learning curve gains based on cumulative units of production
  • Provides first-mover with control over important, possibly scarce input factors
the case for fma demand side
The case for FMA – demand side

Four types of switching costs

  • Contractual costs (“sticky” accounts)
  • Initial investment (time & $)
  • Habit formation (learning period, familiarity)
  • Brand strength based on relevance, awareness, esteem
several key aspects about capturing a first mover s advantage
Several key aspects about capturing a first mover’s advantage
  • You have to be first (or very early) into the market
  • You need to capture a large percentage of the market quickly
  • You need to create switching costs so the customer will stick with you
  • Very expensive, hard to win
  • First Movers rarely win

Entry Strategy


Devise Initial Market Test

Create a Platform