Thursday, October 18, 2012

GM's First Mover Disadvantage

One of the topics I discussed in my book, Living in the Innovation Age, is the fallacy of the first mover advantage. While there are cases where first movers have been highly successful, there are plenty of cases of disillusionment and despair as well. I used the meteoric success of TiVo followed by a decade of sagging profit as a case-in-point in my book. Here's another good example. The October 1 - October 7 issue of Businessweek discusses how GM too might have fallen prey to the "First Mover Advantage Fallacy" with its early introduction of the redesigned  "2013 Chevy Malibu" in February 2012. While the initial results following the introduction were positive, it turns out that GM might have been better served if it had delayed its launch until it had the complete lineup ready. That's exactly GM's competitors - Toyota, Honda, Nissan, Ford, and Hyundai - did. They waited and learned from early customer reactions to the Mailibu, which is a major reason why today the Malibu is having a tough time matching up in key measures such as prices, gas mileage, and technology gadgets.

Check out the Businessweek article titled "GM's First Mover Disadvantage."

The Bottom Line
Don't be too quick to assume a positive correlation between successful innovation and being first to market.

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