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FIRST MOVER

THE ILO

What is first mover advantage?

First mover advantage is the idea that by being the first to enter a new market, a business gains a commercial advantage over its actual and potential rivals leading to higher revenues and profits over time.

Second-movers can learn much from first mover mistakes!

First scaler advantage may be more important in the long run than first mover advantage – the key for a business is to get up to scale to become a competitive, perhaps dominant force, we have scaled, sector by sector and country by county plans are already in business.

Advantages of being the first mover

 
  • A business first into the market can develop a significant competitive advantage through learning by doing – making it difficult and costly for new firms/rivals to enter, in the case of ILO as we created it, we are significantly ahead allowing our specialists an additional strategic advantage.
  • They can exploit internal economies of scale and also build brand loyalty/ repeat demand and surround the space with feeder sites and services that strengthen the grip on market share, see www.ILOeco.com for information on these site
  • Consumer behaviour can become habitual – and this is hard to eat into! Behavioural economists argue that default behaviour is strong in many of the decisions that we make.
Risks from being the first mover into a market
 
  • Employees from the first mover business may leave to set up challenge brands – taking some of the intellectual capital with them, our team has worked together for 20years as we adapted and pivoting into this ILO structure.
  • First movers are often unprofitable, the failure rate can be high, we are already profitable, in fact we were already profitable before we launched the exchange
  • Second-movers can learn much from first mover mistakes! 

First scaler advantage may be more important in the long run than first mover advantage – the key for a business is to get up to scale to become a competitive, perhaps dominant force, we have scaled, sector by sector and country by county plans are already in business.

Example of First Mover Advantage – The Zero to 100 Game

 

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Example of First Mover Advantage – The Zero to 100 Game

– Two players A and B take turns choosing a number between 1 and 10 (inclusive)

A goes first

The cumulative number of all of the numbers chosen is calculated as the game progresses

The winner is the player whose choice of number takes the total to 100 or more

Does this game have first mover advantage?

The answer is YES!

For Player A to win, he/she must chose a number that takes the total to 100 or more.

The only way this can happen is Player B to leave me a number of 90 or more

Player A needs to ensure Player B is left with 89

Player B knows this too

Player A needs to leave Player B with 78

Using backward-induction to work towards the solution

100 – 89 – 78 – 67 – 56 – 45 – 34 – 23 – 12

Player A can ensure he/she wins by going first and choosing 1

It’s a well known example and you check out more by studying Game Theory online.

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