What kind of attributes can be more successfully utilized by late entrants to compete with a flourishing early entrant in the market has been of keen interest to marketing practitioners as well as to academic researchers. This research deals with the impact of attribute alignability and value relevance on the effectiveness of the late entrant’s differentiation strategy to cope with a successful early entrant.Zhang and Markman(1998) suggested that late entrants are better off emphasizing alignable rather than nonalignable differences. In this research, however, we demonstrate that the late entrant can be at an advantage over the early entrant by emphasizing nonalignable differences as long as they have a large impact on the overall perceived value of the product. This research also shows that the preference for the late entrant rendered by alignable differences are attenuated when the price level is controlled for.In this research, two experiments were conducted using a sample of college students to test the hypotheses developed through the review of the existing literature. In Experiment 1, the respondents’ preferences for of the early entrant, late entrant, and enhanced late entrant were analyzed with a one-way ANOVA. The respondents preferred the enhanced late entrant regardless of the attribute relevance, when the enhanced late entrant had alignable advantages over the early entrant. However, when the enhanced late entrant had nonalignable differences from the early entrant, respondents’ preference varied depending on the relevance of the attributes. That is, when the respondents perceived that the enhanced * Professor of Marketing, College of Business Administration, Sogang University.