In Which of the Following Instances Are First-Mover Disadvantages Not

question 42

Multiple Choice

In which of the following instances are first-mover disadvantages not likely to arise?

• A) When the costs of pioneering are much higher than being a follower and only negligible buyer loyalty or cost savings accrue to the pioneer
• B) When rivals are employing offensive strategies rather than defensive strategies
• C) When the products of an innovator are somewhat primitive and do not live up to buyer expectations
• D) When buyers are skeptical about the benefits of a new technology or product being pioneered by a first mover
• E) When rapid market evolution (due to fast-paced changes in technology or buyer preferences)gives fast followers and maybe even cautious late movers the opening to leapfrog a first mover's products with more attractive next-version products

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Definitions:

Market Risk

The risk of losses in investments caused by factors that affect the entire market, such as economic changes or political events.

Beta

An assessment tool for determining the comparative volatility or systematic risk of a portfolio or security against the market at large.

Volatility

Volatility is a statistical measure of the dispersion of returns for a given security or market index, indicating the degree of variation from the average over a certain period.

CAPM

The Capital Asset Pricing Model is a formula used to determine the expected return on an investment, factoring in its risk compared to the market.