Which of the following statements is true of first movers in comparison with early followers and late entrants?
A) Cost of developing necessary production processes and complementary goods is lower for first movers.
B) First movers are in a better position to exploit buyer switching costs and also to reap increasing returns advantages.
C) First movers, being incumbents, have greater ability than later entrants to respond to changes in the industry environment and adopt newer production processes.
D) First movers fail to capture scarce resources such as key locations, government permits, access to distribution channels, and relationships with suppliers.

Question

Quizplus · Accepted Answer

First movers have an advantage in exploiting buyer switching costs and gaining increasing returns advantages. However, the cost of developing necessary production processes and complementary goods may be higher for them. First movers may also face challenges in adapting to changes in the industry environment due to their established practices and structures. Late entrants may have an advantage in capturing scarce resources as they can learn from the experiences of first movers.

Which of the Following Statements Is True of First Movers