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Invention and innovation: An introduction
Invention and innovation: An introduction

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10.7.2 Follow the leader

Some companies have a defensive strategy and aim to follow the leader. Such companies hope to profit from the mistakes of the first-to-market company by devising incremental design and performance improvements and cost reductions compared with the original product. In addition they hope to exploit the new market that has started to grow, so timing is important. In the area of consumer electronics, for example, most of the inventions (radio, television, audio and video tape recording) were first brought to the market by European and US companies. But it was the major Japanese companies (such as Sony, JVC, Toshiba) that captured a large share of the mass market through reducing the cost of these devices and improving their performance.

The best of these companies were able to use the resources gained from being successful followers to then adopt a more offensive strategy and invent new products, such as Sony with the Walkman. Sony was first to market with this innovative product, which quickly became an important contributor to the company's profits. A number of companies followed Sony into this market with variations on the Walkman. However Sony had sufficient a head start to the extent that almost 25 years later it still had the largest market share in most areas of personal audio.

Interestingly the area it isn't performing in as well yet is the newest, the market for digital music players. Here it wasn't first to market and currently (2005) this market is dominated by a mixture of smaller companies and a few big companies that developed players before Sony.