Pioneer and Follower Strategies
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Pioneer and Follower Strategies
Pioneer strategies are new, of their kind developed with higher risks but the greater reward if successful but also with potential failures over their competitors (Kalicanin, 2008).. Competitive advantage of pioneer approaches is sustainable throughout the product life cycle resulting to long-term success. There are factors and circumstances under which this approach can achieve success in the end. Since it is a new entry strategy, there is a need to focus on the segments to the rules running the market (Kalyanaram, & Gurumurthy, 2014).
If a pioneer develops a product with attractive attributes to the larger segment of the market, it could promote importance that favors its products or services. This will position the product to be a brand of reference used by customers to compare other products. Members on their part need to convince their consumers that the products they are offering are superior to the original, first entries products. Pioneers may target more relevant market segments, but the followers would instead target a niche or a smaller market segment to be successful. Pioneers and members need to minimize their product switching costs to eliminate consumer reluctance.
Pioneer plans set standards on their variables making hard for competitors to imitate or copy their names. This gives the pioneering authority to raise the cost of entry and to pre-empt any potential competitor. Well-designed distribution channel for a new product offers a network of best distributors for a company (Global, 2014). Members need to develop their niche and get familiar with expensive brands after achieving successful product entry and expand its market share. Both a pioneer and the followers need to lower per unit costs to reduce life cycle and increase sales (Cogeco.ca). These strategies compete on product costs with the follower having to achieve the levels of price offered by the pioneer.
Members must develop capabilities to take advantage of the hitches experienced by pioneers. This can be done through introduction of more specific products to a market segment whereas the pioneer may think of satisfying two different segments at the same time. A member may also take on product enhancement to limit any flows to gain preference for their products.