Pioneering New Markets refers to the concept of being the first entrant in a new market and achieving the first-mover advantage. Pioneering New Markets is risky but also rewarding as it helps to gain a large market share Example – Netflix In 2007 Netflix became a pioneer of online streaming and this move changed its fortunes overnight and revamping as an international powerhouse Pioneering New Markets – Sony Walkman Sony Walkman was launched in 1979 and within a short time saw a huge surge in sales volume. Pioneering New Markets – iPod iPod thrived because of its unique software that enabled users to download music from the internet directly into the product. Types of Pioneers Technology Pioneer Technology Pioneer occurs when an organization introduces new technology into a product category. Explain - Tesla Product Pioneer Product Pioneer occurs when an organization introduces a new type of product into the world market. Example – Sony Walkman Business Model Pioneer Business Model Pioneer occurs when an organization introduces a new business model for the first time. Example - Airbnb Benefits of being a Pioneer in the Market 1. Pioneer brands have the option of changing previous and formulating new preferences based on their products. Example – Amazon, Google, Jeep, Twitter 1. The switching cost helps to build brand loyalty Functional Switching Cost occurs when an organization suffers a loss in unique features Monetary loss occurs as a penalty for breaking a contract for equipment replacement Psychological loss occurs to the learning functionality of competitor’s offerings 1. Availability of scarce resources provides an advantage for the company 2. Act as barriers to entry for competitors 3. The Learning Curve proves beneficial to the company Drawbacks of Being a Pioneer 1. Offers free riding to later entrants. Example - Compaq 2. Leads to incumbent inertia. Example - Nokia 3. Market uncertainty is high, Example - Kodak This video is on Pioneering New Markets and it has the following sub-topics. Time Stamps 0:00 Introduction 00:48 Pioneering New Markets – Sony Walkman 01:29 Pioneering New Markets – iPod 01:53 Types of Pioneers 01:55 Technology Pioneer 02:30 Product Pioneer 02:40 Business Model Pioneer 03:09 Benefits of being a Pioneer in the Market 03:12 Preference Formulation 03:36 Switching Cost 04:00 Resource Advantage 04:16 Barriers to Entry 05:05 Learning Curve 05:24 Drawbacks of Being a Pioneer 05:27 Free Riding 05:56 Incumbent Inertia 06:53 Market Uncertainty