Order of market entry: Examining first mover advantages among social networking sites

Many different factors may affect the success of a rm. In business literature, order of market entry has been regarded as one of the determinants of success. Order of market entry refers to the time a business rst enters its market (Robinson, 1988). In business theory, it has been commonly believed that being rst in marketing a new product or technology provides advantages (Hoppe & Lehmann-Grube, 2001). First mover advantage theory posits that rst movers have a competitive advantage because successful followers must overcome barriers to entry that are formed by early entry (Denstadli, Lines, & Gr ø nhaug, 2005). Prior research suggested various sources of barriers to entry. One is learning effects. That is, rst movers’ experience, accumulated from the learning curve, can pose a substantial barrier to entry to later entrants (Lieberman & Montgomery, 1988). Another source of barriers to entry is that rst movers can secure R&D and patents (Mellahi & Johnson, 2000). Other sources of barriers to entry include cost advantages (Robinson & Fornell, 1985), switching costs (Lieberman & Montgomery, 1988; Porter, 1985), and economies of scale (Kerin, Varadarajan, & Peterson, 1992). In addition, the acquisition of quality resources by rst movers is a source for barriers to entry for followers (Barney, 1991).