Why cant pioneering innovative companies sustain their first mover Essay

Why cant pioneering innovative companies sustain their first mover advantages A case analysis of Research in Motion - Essay Example Since the introduction on the market of the Blackberry 850, recurrent product evolutions and new innovation developments such as the Blackberry Pearl continued to find market favour with mass market consumers and corporate buyers alike. The Blackberry was the first device of its kind on the market, thus giving Research in Motion significant competitive and profit advantages. Porter (2011) identifies that a business’ position can be weakened when there are substitute products on the market. However, being a true innovator in wireless handheld devices, until 2007 there were virtually no comparable products in the mobile market, thus giving RIM significant market power. However, in 2007, Apple Inc. launched its own wireless device innovation, the iPhone, which was comparable if not superior to Blackberry products. This led to the development of the Blackberry Storm, a competitive product offering designed to outperform Apple’s first innovative smartphone launch. The Storm, though, received considerable negative publicity with dissatisfied consumers stemming from problems connecting to AT&T’s 3G network (Phone Arena 2009). ... Being the innovator in providing smartphone technologies, Research in Motion was able to establish barriers to new market entry by building a loyalty to the company and the Blackberry brand. Such loyalty, however, does not occur overnight or within a vacuum without publicity and promotion. As such, it was not until approximately 2006 that the share price exploded, which would be an appropriate time period by which to establish loyalty, especially with the corporate markets. It was not until 2007 with the release of the Apple iPhone that any notable competitors maintained ability to move against the market share of Blackberry, thus investors believed until 2008 that RIM would always dominate the market. This is evident in the interactive stock chart (below) showing the growth and sudden declines of stock valuation for RIM. Furthermore, as there was not the technological prowess with competitors (Blackberry was supported by substantial venture capitalist investment for development), RI M maintained dominance until 2007 in this industry. It was not until major players began changing their operational strategies to develop similar products; which RIM was not prepared to combat with an appropriate contingency plan in the event of new competitive entrants. Associated with loyalty, Blackberry was able to develop a powerful reputation for quality by having a superior product on the market. Research in Motion experienced advantages in this capacity as there is a consumer propensity to judge pioneers more favourably to late movers. Without having to invest much capital and other investment into concentrated and focused advertising, as the Blackberry was quite unique to other mobile technologies on the market, it imposed late entrant costs