First-Mover Advantage (FMA)

The advantage that comes from being the first in a market in terms of providing particular products and/or services.

The first-mover advantage (FMA) is the advantage that an enterprising individual or firm has in a locality because they were the first to offer a particular goods or service. This advantage is crucial because it means that the first mover (also referred to as the principal trader) is able to set the tone of price and value. As a result, late-comer enterprises have to expend more resources in order to get on equal footing with the first-mover.

FMA is all well and good when you are the principal trader. However, when you arrive second on the market or region, you generally have to compete with lower prices for the same goods or be more innovative. Strategies such as the Blue Ocean Strategy were invented to deal with FMA.