What advantage does a late mover gain from the first mover's investment?

A late mover can gain significant advantages by leveraging the established networks and relationships created by first movers. When a first mover enters a market, they often invest heavily in building brand recognition, customer loyalty, and distribution channels. These established connections can serve as a valuable resource for late movers, allowing them to enter the market more easily and effectively.

For example, late movers can benefit from the first mover’s experience in understanding market dynamics, consumer preferences, and operational challenges. They may also avoid costly mistakes that the first mover faced, allowing them to refine their strategy based on observed successes and failures in the market. By exploiting these established networks, late movers can reduce the time and resources needed to build their presence, allowing for a more strategic and potentially profitable entry.

While the other options touch on related concepts, they do not encapsulate the primary advantage that late movers gain from first movers as effectively. For instance, while some late movers might find it easier to enter without establishing connections due to these existing networks, the core strength lies in the ability to leverage those pre-existing relationships rather than having an outright freedom from investments or access to proprietary technology.