Remember When Amazon Led the Emerging Online Bookstore Industry?

Amazon created an industry around technological innovation: the idea of the online bookstore. Customers' needs were developing, and emerging towards a new .The result was superior performance for a time... In fact, from 1995 until who knows.

That was Amazon's advatage: They were first movers in the development of this industry; they created the strategic and technological decisions early enough to where firms either imitated them (Barnes & Noble) or joined them (Borders).

1. Technological leadership

Amazon framed customers' expectations about what an online book retailer loos like, the user experience, the organizing of genres, the pricing, customer ratings and reviews, and more. Building on their success of the online bookstore, Amazon expanded their inventory to include music, electronics, apparel, toys, and housewares, all the while continuously improving their users' experience while keeping it familiar enough to not lose their customers.

2. Preemtion of strategically valuable assets

In emerging industries, many of the rules and standard operating procedures for competing and suceeding are yet to be established, so they can sometimes create the rules that end up benefiting them. Amazon formed relationships with publishers and authors far before others were able to reach out to them. This bargaining power even leads to Amazon being able to control price. Additionally, strategically-placed distribution centers and fulfillment methods are incomparable to what other companies could replicate. 

3. Creation of customer-switching costs

Amazon created cutomer expectations around online boostore and, ultimately, e-commerce, and customers are happy with what Amazon has shaped to be. Customers have an account, they do one-click shopping, and they have no need to go elsewhere. Why do that, when you have everything you need at your fingertips? The risk of being disappointed is too great.

Most first-movers see the advantage of maintaining 7% of the market; Amazon sees much more than that, being one of the most recognized e-commerce retailers on the Internet. Will there every be a second-mover that eclipses Amazon's success? It's doubtful, as no other online company has been nearly as successful. Aso, the second-mover pays approximately 65% more than the first-mover just to be on top. If Amazon is eclipsed, it will be by a very big, technologically-savvy, and luctarive business.

Sources:

• Gaining and Sustaining Competitive Advantage by Jay B. Barney [textbook]
• First-Mover Advantage by Deborah R. Ettington [http://www.referenceforbusiness.com/management/Ex-Gov/First-Mover-Advantage.html]
• First Mover or Fast Follower? by Scott Anthony [https://hbr.org/2012/06/first-mover-or-fast-follower]
• First-Mover Advantages by Stay Young [https://calvinblogger.wordpress.com/2013/03/19/first-mover-advantages/]