When does a follower firm stand the best chance for success in market share leadership? Is it when there are high barriers to entry? Or is it when there is a high potential for imitation? 

Expert Answers
farouk23 eNotes educator| Certified Educator

In reality both high barriers to entry and high potential for imitation should work to the advantage of the follower firm. In the case of high barriers to entry, the follower firm would be able to enter the market knowing full well that the chances of other competitors other than the leader firm are low. They will also have the advantage of being able to enter the market place with the core concepts and business model already proven by the leader firm. This will result in less expenses going towards market research and other support services. An example of this would be the Apple and Samsung rivalry in the Smart-phone market. Apple was the market leader and Samsung followed suit with similar designs and comparable business model, they have now overtaken Apple in overall Smart phone sales.

High potential for imitation could also work in a firm’s advantage for market share; however they will need to differentiate themselves to be succesful. The potential for many competitors could lead to market saturation; this means it would be hard for any one company to dominate the market. Nonetheless a company which can differentiate themselves in terms of service delivery or product quality can come out on top in terms of market share.