ECONOMICS GAME THEORY Case Solution And Analysis, HBR Case Study Solution & Analysis of Harvard Case Studies

Economics game theory Case Study Solution

Under the context of Oligopoly, the First mover advantage refers to the payoff the first mover receives which is higher as compared to the payoffs when moved simultaneously in the market. The first Mover has the advantage to set the game strategy of the market while the other players entering the market later follow the guidelines of the first-mover. In addition, the first mover has the advantage to shape the market forces according to him and set trend in the market. It offers competitive advantage to the fist mover for being the pioneer in the market.

The second mover refers to the players who enters the market after the first mover has set the ground for particular offerings. The second mover has an advantage over the first mover because he has adequate knowledge of the market and know the depth of the sea and thus frame his entering strategy smartly. The second mover has the advantage to learn from the mistakes of the first mover and design an offering which cover those mistakes and area, thus offering a better product/service and harvesting high payoffs.In addition, the second mover has the advantage to target the customers and accumulate the offerings which are the mix of the offerings of the first player with the addition of more features that matches the demand of the market, thus offering a better product/service.

The competitive advantage and payoffs related to the First mover and second mover varies from industry to industry. In an ideal situation, the first mover advantage is better because it enables the player to set the game of the market according to his will, he has an advantage to set the trend that best suits him, and set the competition level, while the other movers have to follow the market trend set by the first mover. But the first mover advantage does not always work in all industries. For example, in field of technology and innovation, the second mover has more advantage over the first, because till the time he acquires the technology, the cost of acquiring reduces and the replication is easy, which offers a competitive edge to the second mover to develop an offering at low cost, thus gaining more in the market than the first player. Lastly, the second Mover may not set the trend but can offer a better version of the same product at low cost because he has data and knowledge of the consumer behavior which the First Mover did not have.

The players in market can achieve First Mover advantage by implementing disruptive strategy or offering a unique product. For example Apple, Apple created a phone when there was no need of such phone and thus created the demand for such a phone. The second mover advantage can be achieved by employing the alternative method of producing a product which reduces the cost and thus enables the second mover to set cost-leadership strategy which offer a higher payoff. The pre-emptive move is credible in most of the cases but again it depends on the nature of the industry the player is trying to enter. For example, banking, pharmaceutical and retailing sectors always offer advantage to the first mover as compared to the second mover. But the case and nature of the payoffs changes with industry type.

5(B) Pre-Emptive First Mover strategy- Gillette &Bic

Under the pre-emptive First Mover strategy there are certain elements that a company can use to counter the competition. As said “The best offense is a good defense”. In past and recently many companies have used such strategy to maintain their position in the market. Among them Gillette and Bic the razor making companies entered the market.Gillette had been the first mover in making razors while Bic followed it lately and offered the same product. Gillette used the Pre-emptive Blocking strategy in which it launched the disposable razors prior to Bic.Approximately a year, the time it took Bic to stabilize itself in the razor industry and thus lost the competition.Here Gillette used the Blocking strategy as an advantage of the first mover. Being the first mover, it has the time, market knowledge, expertise and technology to develop a counter offering that wiped the competition Bic away from the industry while sustaining its position as the market leader.Gillette has been successful in implementing the Blocking pre-emptive strategy because of its expertise and position in the market. It had the prior knowledge of what next the customer would demand and thus developed a new product in a short-time. Expertise and knowledge of the markets helps the players to develop, re-amend or re-strategize the business offering without hurting OR minimizing the market share.

ECONOMICS GAME THEORY Harvard Case Solution & Analysis

However, sometimes, the second mover receives more advantage than the first. Take the example of Apple. Apple introduced the first ever touch phone, with its unique offerings that were exclusive. The strategy of exclusivity offered great advantage to apple, until Samsung jumped into the same sea by offering a better product. Samsung watched how apple acquired the market and then analyzed where the gap lies in the market. After waiting for a long time, it developed its smartphone which comprised the offering of the Apple (features) and accumulation of latest technology at cheap rates which disturbed the market share of Apple. Samsung has been successful because it analyzed the moves of apple and took the advantage of already built demand in the market for smart phones.Samsung exploited the demand by setting the game ahead. It made smartphones common, cheaper while maintaining the benchmark of features offered by Apple.Example same capacity Rom, android software, camera and play store.....................

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