Final answer:
A business that has few competitors in a new market and has the chance to establish itself is known as having a first-mover advantage. This advantage allows for strong brand recognition and the potential to earn above-normal profits until competition increases. Examples include patented inventions and well-established brand names.
Step-by-step explanation:
When a business has few, if any, competitors in an untapped new market, thus having the opportunity to pioneer a portion of the market largely ignored by competitors, this scenario is known as having first-mover advantage. Companies with a first-mover advantage can establish strong brand recognition and customer loyalty before other competitors enter the field.
Businesses like Samsung have emphasized the importance of relentless pursuit of innovation, which can be a core factor in establishing a first-mover advantage. A company that is a first mover in technology or innovation can earn above-normal profits and gain a temporary edge over competitors, who will eventually try to catch up by entering the market or copying the innovation.
Examples of first-mover advantage can include a patented invention, which provides legal protection against competition, a well-respected brand name built up over many years, or an industry where the firm benefits from economies of scale. However, the firm must be cautious, as success may attract competitors that can imitate the product or service, as seen with popular restaurant recipes or laundry detergents with great reputations.