Page 170 - (DK) The Business Book

168 LEADING THE MARKET

Yarn spinning was the first activity to
become entirely mechanized. The British
government restricted export of this
technology, maintaining its first-mover
advantage for as long as possible.

In 1979 Sony introduced the Sony
Walkman, the first portable music-
listening device. Just as Ford had
changed the way people traveled,
Sony changed music-listening
habits—and lifestyles. Its launch
coincided with the aerobics craze,
and millions used the Walkman
to add music to their exercise
workouts. Between 1987 and 1997,
the height of the Walkman’s
popularity, the number of people
starting to walk as exercise
increased by 30 percent, according
a new market, such as Gillette, the superior products. Sony is one to Time magazine. Sony sold 200
men’s grooming business, with its example of a technology company million of their portable cassette
long-held policy to be the “first to that led the market for around 20 players, and by 1986 the word
get it right.” Some companies years, until competition from new “Walkman” had entered the Oxford
choose not to do this; Samsung, for technology arrived. English Dictionary.
example, aims to be a fast follower, Sony’s corporate philosophy is The Walkman evolved from
having learned from competitors. built on “doing things that no one cassette to CD technology, and
else is willing to do.” The business consumers were happy with their
First-mover advantage was set up in the ruins of Tokyo portable music players until 2001,
Being first to market gives a after World War II, and the founder when Apple CEO Steve Jobs said:
company “first-mover advantage,” Ibuka Masaru was determined to “The coolest thing about the iPod
which can be long-lasting or develop leading-edge products and is that your whole music library fits
short-lived. Long-term advantage get them to market faster than the in your pocket.” So began a new
brings durable benefits, either by competition. This idea became a industry, based on portable digital
creating an entirely new market, personal obsession for Ibuka and music, and dominated by market-
or by improving a company’s his successor, Morita Akio. leader Apple.
market share over a long period.
Companies that succeed in Being first is everything
building long-term advantage Leading the way often depends
often dominate their product on the product being embraced by
categories for many years. Hoover “early adopters”—consumers who
and Post-it Notes, for example, It’s not the consumers’ are willing to pay a price premium
were so successful in their market job to know what to be the first to own something.
sectors that their brand names they want. This happened with the launch of
have become generic terms. Steve Jobs Apple’s iPhone in the summer of
Short-term advantage typically 2007. Even though the price was
US former CEO of Apple (1955–2011)
occurs because it is based on new reduced a few months after launch,
technology. Today, innovation is those who had bought at the higher
exceptionally fast in many sectors, launch price did not resent it due to
with increasingly shorter gaps the cachet of being at the forefront
between new introductions and of the latest trends and fashion.