What advantage, if any, accrues to companies offering radio fequency identification products and services in this introductory phase of the market?

Notwithstanding the fate of many “dotcoms” in the early years of the decade, substantial business research has indicated that market pioneers enjoy advantages over companies that follow. Much of the research in the 1980’s focused on consumer markets. However, a landmark study of a broad range of businesses (William Robinson and Claes Fornell, 1985) concluded that market pioneers had higher market shares than later entrants. Similarly, researchers Urban, Carter, Gaskin, and Mucha found that the second entrant obtained only 71 percent of the pioneer’s market share, and the third, only 58 percent.

In the 1990’s, studies focused on consumer and industrial markets generally qualified or disputed the pioneer advantage:

• Several indicated that pioneers had higher returns and longer-lived market share advantages if they were successful, but that they bore a higher risk of failure.
• Brown and Lambkin concluded that the pioneering advantage was linked to the length of time in the market before the second entrant and that over time the pioneer advantage dissipated.
• Tellis and Golder distinguished “pioneers” from “early leaders.” The former experienced higher failure rates; the latter, market leadership and higher market share during the early growth phase of the product life cycle. This was exemplified when IBM overtook Sperry in the computer mainframe market, noted Philip Kotler in his authoritative book, Marketing Management.
• Through innovation, even late entrants can outsell pioneers, according to Ventakesh, Carpenter, and Krishnamurthi.
• In markets with high education barriers, late entrants experienced higher profitability than pioneers, according to S.F. Slater.