Definition - What does First-Mover Advantage mean?
Divestopedia explains First-Mover Advantage
The likelihood that a bidding firm will acquire its target increases when it has acquired a toe-hold in the target firm. However, the chance of overpayment also increases.
Making a first move is an offensive strategy to used to secure an advantageous position over a rival. However, fast followers may possess sufficient resources to overtake first movers in some cases. This is because a first mover has to tolerate the high costs of pioneering and may commit substantial mistakes that later entrants into a market may be aware of and be able to avoid.
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