Followership is a market strategy where businesses enter a new industry after the first mover has already established it. This strategy can be beneficial for companies that lack resources to be the first mover, or want to take advantage of certain benefits that are only available to followers. For example, followers may benefit from the existing infrastructure and customer base developed by the original entrant, allowing them to rapidly enter the market without having to invest significant time or money into setting up their own operations.
On the other hand, following in another company's footsteps can also lead to some disadvantages compared to being a first mover. For example, increased competition means that followers may need to offer better prices or services than their predecessors in order to gain customers. Additionally, by not being involved in the development of an industry from its earliest stages, followers may miss out on opportunities for product innovation due to their unfamiliarity with emerging trends in the sector.
In general, whether choosing between being a first mover or follower should depend on several factors such as capital availability and competitive landscape. Ultimately, each business must assess which strategy will best serve their goals and allow them to gain an edge over their competitors.
Following the first mover into a new industry has multiple advantages and disadvantages. Firstly, the follower or second mover does not have to use as many resources as the first mover on educating consumers on the product. They can also learn from the experience of the first mover. However, they will often not earn as much market share as the first mover. Successful followership stories include Kellogg’s and Coca Cola.
Related Keywords: First Mover Advantage, Competitive Landscape, Market Entry Strategy