BU111 Lecture Notes - Lecture 21: Complementary Good, Market Power, Netflix
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Apple is an example of a disruptive firm: entered market after ibm. New, disrupting firms often win (more market power taken away from existing companies) More suppliers = more bargaining power, reduces profitability and negotiating power. If technology plays a role in suppliers, they can increase the quality of products which is good for the supplier and company (better quality products) Complementary goods increase the value of our goods: e(cid:454). Te(cid:272)h(cid:374)olog(cid:455) (cid:272)o(cid:373)pa(cid:374)ies do(cid:374)"t keep their progra(cid:373)s a se(cid:272)ret so developers (cid:272)a(cid:374) learn it and create complementary apps and other things. When buyers used to be geographically restricted, they were constrained to products around them. Now, we can buy things online and find the best prices (higher buyer power) Buyers feel like they have to buy more with all the products that exist worldwide, giving companies more profit. Buyers who are locked into certain technology have less buying power (ex.
