Strategic Management Unit 3 IP Research Paper Example | Topics and Well Written Essays - 1500 words

Strategic Management Unit 3 IP - Research Paper Example First, such firms benefit from gaining market share and further positioning themselves in best locations. This could affect the theory in that higher market share could cause an increase in cost of operation thus diluting the associated high returns. Secondly, first movers gain new knowledge relevant for success in their fields (Li, Lam, Karakowsky & Qian, 2003). Changes in the knowledge could cause the first mover to find ways to fast learn the emerging knowledge. Being the first, such firms also secure resources and commitments for their provision (Eggers, Grajek & Kretschmer, 2011). This impacts the theory in the context where there is limited information on the resources available. Finally, they have the advantage of establishing and securing long-term relationships with investors, suppliers, customers and distributors, an important concept for firms seeking to develop long lasting business entities. However, Hill, Jones and Schilling (2013) observe that first movers suffer cost disadvantage as they have to establish most of the infrastructure from scratch. This affects the theory in that organisation that requires high set-up capital shy away from pioneering markets, products or services. There is a high uncertainty associated with first movers. This would particularly impact on the theory if the entity is not familiar with the regulations, needs and culture of the target geographical regions. Thirdly, first movers face the risk of adopting a losing strategy that would make them fail and leave opportunities for late entrants who would have learnt from their mistakes (David, 2013). This would be the case if the first mover would not be able to make predictions on their investments. Finally, first movers could invest in obsolete or inferior technology, making this theory particularly unappealing to entities in businesses where technology advances