publication of Kim

The first-mover advantage theory recently saw a renewed interest among the managerial audience with the publication of Kim and Mauborgne’s work on Blue Ocean Strategy (2004). The core argument of Blue Ocean is that rather than fighting in existing markets characterized by intense competition (the so-called Red Oceans), firms should create new markets (the so-called Blue Oceans). Creating new markets, as the Cirque du Soleil did in the entertainment industry (Kim and Mauborgne, 2004) or Swatch in the watch industry (Moon, 2004), is the best way to dominate them and therefore, to reap the benefits of this domination with high profits for the long run.

The reality of the first-mover advantage, however, has long been contested in the academic literature. Based on a detailed historical study of more than sixty industries, Golder and Tellis (1993) contend that the first-mover advantage is an incorrect principle. They identify three primary reasons for it. First, the research that has been done tends to downplay those pioneers who failed. Second, the studies tend to interview current leaders of successful companies who may not have a firm grasp of their industry’s history. And third, the research tends to define markets very narrowly. For instance, is Gillette a first entrant in the razor market? If the market is defined as that of shavers, the answer is no. If the market is defined as that of shavers with disposable blades, then the answer is yes. Interestingly, based on different answers to this question, Gillette is defined as a follower by Golder and Tellis (1993) and as a first mover by Suarez and Lanzolla (2005). Golder and Tellis (1993) conclude that the real causes of enduring market lea- dership are will and vision, not the order of entry. Their work, and particularly the fact that it is based on an in-depth academic study of a large number if industries contribute to the weakening of the case for first-mover advantage.

Indeed, the Blue Ocean approach raises a few questions with regards to innovation. The first is that it is not necessary to create a market to end up dominating it. Google, today’s leading Internet search engine, was a late entrant to the market, coming a good two years after pioneer AltaVista Battelle (2005). When Google was launched, there were already several search engines on the market. Similarly, Apple’s iPod, today’s almost iconic MP3 player, was only introduced in 2001, three years after the first mass-market MP3 players from

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