When a first mover does not have complementary assets, barriers to imitation are high, and there are several capable competitors, the first mover should: a. sell the technology outright to another firm. b. enter into a joint venture to protect the product. c. license the innovation to others. d. lower the barriers for imitation. e. wait until competitors develop an alternative product.

Question

Marisol Sheppard

Business

21 January, 00:22

When a first mover does not have complementary assets, barriers to imitation are high, and there are several capable competitors, the first mover should: a. sell the technology outright to another firm. b. enter into a joint venture to protect the product. c. license the innovation to others. d. lower the barriers for imitation. e. wait until competitors develop an alternative product.

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Larry Lynn · Answer 1

b. enter into a joint venture to protect the product

Explanation:

First Mover is the big initiator of a new product, which gains a competitive 'first mover advantage' for being the pioneer of the idea in the market.

When a first mover doesn't have complementary assets, the barriers to imitation are high, and there are several capable competitors : It implies that there is huge unfulfilled demand in the market, which can't be satisfied by the desiring competitors through illegitimate imitation. But, the competitors desiring to enter can be leveraged to procure, provide for the complementary asset the 'first mover' firm is lacking. This can be done by entering into a joint venture with them.

It would lead to expansion - due to complementary asset access, also protect the product.