First Mover

DEFINITION of 'First Mover'

A form of competitive advantage that a company earns by being the first to enter a specific market or industry. Being the first allows a company to acquire superior brand recognition and customer loyalty. The company also has more time to perfect its product or service.

BREAKING DOWN 'First Mover'

Examples of first movers include innovative companies such as eBay and Coca-Cola. eBay was the first company to take the auction process online, kicking off operations in 1995. Coca-Cola was the first cola producer, and began selling its product to the public in 1886; it has been a perennial powerhouse in the industry ever since.

First movers are often followed by competitors that try to capitalize on the original company's success. By this time, however, the first mover has usually accumulated enough market share, expertise and customer loyalty to remain on top.

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