Defeating the first mover advantage: cialis beats viagra in the Italian market.

Abstract

Being first into a market brings rewards, but also risks. The basis of first-mover advantage is simple: by being the first to enter a new market, the business gains an advantage over its actual and potential rivals. The aim of this thesis is to investigate the First Mover Advantage phenomenon in pharmaceuticals. Particularly, we study the battle that took place between two drugs; the pioneer, Viagra, and the follower, Cialis. The pharmaceutical industry presents several peculiarities and has not been studied extensively by authors so far. Initially, an extensive literature review on the advantages and disadvantages of pioneering studies that took place in various sectors. Internal and external theory aspects as well as the conditions under which first-mover advantage is sustainable are being analyzed. Then, the literature review continues with the follower-mover advantages. During the literature review various cases of companies from different industries are being set out. Finally, we discuss some specific issues of high interest, and present a detailed historical overview of the theory from the '30s until today. As far as the research part of the study is concerned, we start with some information on the pharmaceutical industry and present the stories and characteristics of these two particular drugs. Thereafter, we evaluate the responses to a questionnaire addressed to the follower-mover company‘s (Elli Lilly) executives in order to explore the facts occurred in the Cialis market in Italy from an inside point of view. The results are very interesting as they disprove the "myth" of "whoever is first wins". We conclude that the First-Mover Advantage did not keep the follower Cialis from outselling the first-mover Viagra.