Which of the following is a disadvantage faced by first movers in an industry?

• A. Establishing strong brand recognition early
• B. Access to scarce resources before competitors
• C. Ability to set industry standards
• D. High costs of developing new technologies and educating the market

Answer: (D)

Verified step by step guidance

1. Understand the concept of 'first movers' in an industry: these are companies that enter a market or develop a product before competitors.
2. Identify typical advantages of first movers, such as establishing strong brand recognition, accessing scarce resources early, and setting industry standards.
3. Recognize that despite these advantages, first movers often face significant disadvantages, including high costs associated with developing new technologies and educating consumers about the product or service.
4. Analyze each option given in the problem to determine which describes a disadvantage rather than an advantage.
5. Conclude that 'High costs of developing new technologies and educating the market' is a disadvantage because it involves substantial investment and risk that later entrants may avoid.