In emerging industries
A) firms that are first movers are unlikely to gain product-differentiation advantages based on buyer loyalty and high switching costs.
B) firms that are first movers can gain product-differentiation advantages based on perceived technological leadership.
C) product-differentiation efforts are focused on product refinement as a basis of product differentiation.
D) firms can sometimes be tempted to exaggerate the extent to which they have refined and improved their products and services.

Question

Quizplus · Accepted Answer

In emerging industries, first movers can gain product-differentiation advantages based on perceived technological leadership because customers may perceive them to have greater expertise and be more innovative. However, they may not have established buyer loyalty or high switching costs yet, so they may not have those advantages. Choice A is incorrect. Product differentiation efforts in emerging industries may not just focus on refinement, but may also include offering new and innovative features. Choice C is too narrow. Choice D is a potential issue, but not a universal truth in emerging industries.

In Emerging Industries