The Second Mover Advantage: How to Succeed by Following the Leader

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When we think of successful businesses, we often think of the pioneers who created new markets or disrupted existing ones. We admire the vision and innovation of companies like Apple, Amazon, Netflix, or Uber, who were the first to offer products or services that changed the way we live, work, or play. But being the first mover is not always a guarantee of success. In fact, many first movers end up being overtaken by competitors who enter the market later and learn from their mistakes. These competitors are known as second movers, and they have a distinct advantage over the first movers.

What is the Second Mover Advantage?

The Second Mover Advantage is the ability to benefit from the experience and feedback of the first mover, and use it to improve your own product or service. By observing the market reaction, customer behavior, and competitor response to the first mover, you can identify the gaps and opportunities that they missed or ignored. You can also avoid the costs and risks that the first mover had to incur, such as educating the market, building awareness, developing technology, or dealing with legal issues. You can then leverage your existing resources, capabilities, and relationships to create a better value proposition for your target customers.

There are also other advantages as well:

  • You can observe how they create value for a particular group of customers and can meneuver yourself to provide value for another group of customers who may want a similar product but be more upscale or cheaper. Think Samsung going for customers who did not want to pay high prices for Apple products.
  • You can save on the costs of research and development, marketing as you avoid the mistakes the First Mover has made. You can leverage the competitor’s efforts to create awareness and demand for the new offering.
  • If a competitor’s first mover products actually do create customer value, the first mover may not be able to service all the demand. Second movers may be able to coattail on the success and service the demand unmet by the first mover.
  • You can wait for the market to mature and stabilize before entering. You can avoid the uncertainty and volatility of the early stages of a new market or product life cycle.

How to achieve the second mover advantage?

To achieve the second mover advantage, you need to follow a few steps:

  1. Analyze the first mover’s strengths and weaknesses. What are they doing well, and what are they doing poorly? What are their unique selling points, and what are their pain points? How are they positioning themselves in the market, and how are they differentiating themselves from other players?
  2. Identify your own strengths and weaknesses. What are your core competencies, and what are your gaps? What are your resources, capabilities, and networks? How can you leverage them to create a competitive edge?
  3. Define your target market and customer segments. Who are you trying to serve, and what are their needs, wants, preferences, and behaviors? How are they different from the first mover’s customers? How can you segment them based on their characteristics or behaviors?
  4. Develop your value proposition and positioning strategy. What value can you offer to your target customers that the first mover cannot? How can you solve their problems or satisfy their desires better than the first mover? How can you communicate your value proposition clearly and convincingly?
  5. Execute your marketing mix. How will you deliver your product or service to your target customers? What channels will you use to reach them? How will you price your product or service? How will you promote it and create awareness? How will you measure your performance and feedback?

Examples Of Second Movers Who Succeeded

There are many examples of second movers who succeeded by following the leader and improving on their offerings. Here are some of them:

  • Google was not the first search engine, but it became the dominant one by offering a faster, simpler, and more relevant search experience than its predecessors like Yahoo or AltaVista.
  • Facebook was not the first social network, but it became the most popular one by offering a more user-friendly, engaging, and personalized platform than its predecessors like MySpace or Friendster.
  • Spotify was not the first music streaming service, but it became the leading one by offering a more convenient, diverse, and customized listening experience than its predecessors like Pandora or Napster.
  • Airbnb was not the first online marketplace for short-term rentals, but it became the largest one by offering a more affordable, authentic, and diverse travel experience than its predecessors like Couchsurfing or HomeAway.
  • Tesla was not the first electric car maker, but it became the most valuable one by offering a more stylish, powerful, and innovative driving experience than its predecessors like Toyota or Nissan.

Conclusion

Being the first mover in a market can give you a head start, but it can also expose you to many challenges and uncertainties. Being the second mover can give you an edge over the first mover by learning from their experience and feedback, and using it to create a better product or service for your target customers. The key is to analyze the market situation carefully, identify your own strengths and weaknesses, define your target market and customer segments, develop your value proposition and positioning strategy, and execute your marketing mix effectively.

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