Rutgers Business Policy And Strategy Practice Exam

First movers can gain loyalty and earn above-average returns. Which option best reflects this idea?

Gains loyalty. Earns above-average returns. Do not gain loyalty. Can gain loyalty and earn above-average returns.

Correct Answer:

Can gain loyalty and earn above-average returns.

Explanation:

First-mover advantage means entering a market early can give a firm pathways to build customer loyalty and achieve higher profitability, but those outcomes aren’t guaranteed. The best choice captures both possibilities in one statement: you can gain loyalty and earn above-average returns. It reflects the potential benefits of being first—brand awareness, customer relationships, and early pricing or distribution advantages—while still leaving room for variability based on execution, competition, and market changes. The other options miss one of these dimensions or deny the possibility altogether, so they don’t fully reflect what first movers can achieve.

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