Question

Share a few sentences about what you learned from the Tesla Case Study that was about First Mover Advantage. What are the strengths and weaknesses?

Answer 1

ADVANTAGES OF FIRST MOVERS:

1. Creating a durable customer base and brand loyalty comes easy for the first movers. We can take Apple’s example and interpret what Tesla has achieved in its market as a direct correlation between the two.

2. Once a first-mover shows its consumers, it can build world-class products; the consumers are more forgivable for the next iterations as long as the company can maintain the goodwill.

3. First movers are more likely to gain government support, especially for EV segment due to environmental concerns and emission mandates, making their position unique in the market.

4. FIrst movers have the advantage to be able to utilize economies of scale and scope, something which Tesla is still evolving to use better.

DISADVANTAGES OF FIRST MOVERS:

1. Hard to create a market unless the product is remarkable or a complete revolution in the way consumers think of it. Since most customers are not willing to take a risk.

2. Innovation, enough to create the necessary outlook and outcome in the market comes at a high cost of both capital and high risk on the front of marketing, which is what Tesla was initially not able to get the hang of, even with bringing out exceptional products.

3. The second movers and the followers do not have the risks associated with creating the market, neither do they have to spend as much capitol building it, which puts them in a uniquely suited position to invest in their operations rather than the market, bringing every new entrant as a threat to the first movers.