Anastasia is considering introducing her new line of high-end food products into Mexico. She has heard through a friend that one of her competitors is planning to do the same. Give the arguments as to why it can be better to be the first mover into the market and why it might be better to be the second.

Question

What will be an ideal response?

Answer 1

It can be good to be the first mover because she is able to define the market she is entering. Anastasia can set prices as she sees fit without having to worry about existing competitors. She can build her brand much easier as the first mover as the focus is on her. Being first will allow her to build brand loyalty and volume and let her quickly learn about the market.
Yet it might be good to be the second mover into the market as well. By being able to let the first mover incur all of the costs to build a market she can piggyback her brand off of them. Anastasia also lets the first mover educate the market about the product and build up demand for it. Also, by moving in later she can see how best to navigate the market as a foreign entrant and how trade regulations and barriers need to be navigated.
As shown, there are advantages to either strategy. Ultimately it is dependent on Anastasia and how confident she is in her knowledge of the local market, her product, and her entry strategy to determine if she is better off moving first or waiting for someone else to.