Are there first-mover advantages in B2B ecommerce technologies?

Abstract

Recently, "dot-com " startups relied on the well-known concept of "first-mover advantage" to justify huge marketing expenses and large financial losses. The idea was that once the firm had gathered customers, it would keep those customers because it had a first-mover advantage. But was that assumption valid? We analyzed whether first-mover advantage actually occurred in 19 information technology product categories that enable B2B ecommerce (and 6 that enable B2C ecommerce). Consistent with earlier studies in other industries, we found that, in half the product categories, the current leaders were among the first three entrants. However, we identified an important refinement. In at least 80% of the product categories in our sample, the first movers lost their initial advantage. This paper presents detailed results, including pioneer lead times and leader lag. It also presents implications for strategic management practitioners, as well as suggestions for further research.