Electronic commerce and application Assignment Example | Topics and Well Written Essays - 1750 words

Electronic commerce and application - Assignment Example This paper explores the existing debate between first-mover and follower firms to study the impact of each of them. The synthesis of the existing literature points out that the first-mover advantage in e-commerce comes from both the customer and the producer side. It has been documented that the first-mover firms have an opportunity to obtain greater knowledge about customers and securing their trust. Works of researchers like Reichheld and Schefter (2000) had comprehensively pointed out the advantages that accrue to the producers on account of FMA. Another recurrent factor in the academic discussions is the higher market share that results from the FMA. They suggested affiliate relationships, establishing partnership with major portals and increasing access to financial resources as the major advantages (Barney, 1991). One of the major examples of firms using e-commerce for growth is Netflix which has introduced features like personalization tools and recommendations systems as a useful mechanism to differentiate between customers in the rental business. Similarly, e-bay had also banked on the e -tailing technology to rapidly expand its set of buyers and sellers. Despite the advantages that can be earned from the FMA, several researchers have also shown that follower firms can also gain a number of advantages by replicating the efforts of the leading firms (Suarez and Utterback, 2007). For instance, the research of Golder and Tellis (1993) had shown that late movers can easily become free riders on the first-movers allowing them to obtain similar knowledge regarding buyer education and enhanced security in transactions. Other researchers like Suarez and Utterback (2007) have shown that late movers can have additional advantages as the market uncertainties and technological drawbacks are removed by the time they enter. Finally, factors like customer satisfaction and customer needs can only be comprehended after a certain time span has elapsed proving