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First-mover advantage is a superior strategic position enjoyed by the first firm in a new market. It is a monopoly-like advantage that includes both a high market share and pricing power. The effects of a first-mover advantage can be temporary if the position isn't successfully defended. The following are types of first-mover advantage.
Technological LeadershipDeveloping capabilities in an area of technology that are difficult or impossible to match. This may include intellectual property such as patents and trade secrets.BrandA brand that becomes ingrained in the culture of the new market. For example, the first brand of snowboard may garner a certain amount of respect and esteem by enthusiasts of the sport.
ResourcesSecuring scarce resources that make it difficult for others to enter your market. This is similar to the advantages of traditional monopolies such as railways whereby it is extremely difficult for a new competitor to enter the market as the land required isn't available.Switching BarriersThe first firm in a new market is sure to capture most of the initial customers. Such customers may be reluctant to switch or they may face switching costs.
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