Paper Number: PA051048 Paper Title: Late mover advantages of formulating strategy – A case of non-profit organizations Author(s): Rinku Bhattacharya, Westhab, Inc., Valhalla, NY, USA Summary of Research First-movers into a market have several distinct advantages which preempt the entry and success of future entrants into the market. The existing research leans towards suggesting that the advantages enjoyed by the pioneer tend to be stronger than potential disadvantages with specific exceptions. This paper looks at the case of the non-profit industry and contends that late movers in the non-profit industry have a significant advantage in developing strategy and are consequently more successful than pioneers, largely due the free-ride advantages of late movers due to the awareness created by the first movers in the prospective market. Description Timing, orders of entry, and strategic advantages have been examined from several perspectives. This paper looks at these issues in the context of non-profit organization. Specifically, this paper contends that due to the unique nature of non-profit organizations, first mover advantages cannot be achieved and sustained in the non-profit sector. The lack of sustainability is largely because 1. The non-profit industry does not have strong barriers to entry. 2. The primary strategic tool for a non-profit organization is its mission, which is very difficult to change or modify, resulting in a very high an ingrained sense of inertia. 3. The pioneer in the market cannot lay claim to developing the market and creating awareness for an issue, which is an uphill task for the pioneer. Consequently late-entrants are able to leverage the above disadvantages, which outweigh the benefits of being the first to enter the market. The late entrants are also able to, 1 Sustain significant free-rider advantages by reaping the benefits of the awareness and knowledge base created by the pioneers in the field. They are able to leverage greater financial support for their position, since they are able to look at the pioneers as a test case and get a fair understanding of donor choice and needs. The paper is organized into four sections to look at the above issue. In the first section we define and discuss the theory on first-movers and discuss the advantages and problems of first mover firms in the marketplace. The second section outlines the discerning characteristics of non-profit organizations and discusses how the late-entrants in the non-profit industry reap the benefits of information, and how they can use these benefits to effectively position themselves into the new market. The third section the hypotheses are defined and discussed and the measurement criteria are outlined. These hypotheses are tested against a selected sample of organizations, covering a cross-section of the industry. Finally, in the last section some of the limitations and areas of further research are discussed and identified. Selected Biblography Agarwal, Rajshree (1996), "Technological Activity and Survival of Firms," Economics Letters, 52 (July), 101-108. Boulding, William; Christen, Markus (2001), “First-Mover Disadvantage”, Harvard Business Review, Oct2001, Vol. 79 Issue 9, p20, 2p Cottrell, Tom; Sick, Gordon (2002), “Real options and follower strategies: The loss of real option value to first-mover advantage”, The Engineering Economist; Volume, 47 Issue 3, Start Page 232-263
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