BU111 Lecture Notes - Lecture 6: Complementary Good, Switching Barriers, Disruptive Innovation
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Installed base: amount of people that purchase your product. Say that you are coming out with your own tablet. You are currently dealing with a vicious cycle b/c existing tablets are crushing you. First explain why you are in a vicious cycle and then explain how you can change your vicious cycle to a virtuous. Switching costs: contract; penalty if you leave; time; energy. Presents improvements to existing products in expected ways. Provides mainstream, high-margin customers w/ enhancements in product functionality. : (how it relates to diamond-e: organizational structure and capabilities, large firms take long time to change, big vs little boat turning, orga(cid:374)izatio(cid:374)al pro(cid:272)esses (cid:449)eed out ideas that are(cid:374)"t ser(cid:448)i(cid:374)g (cid:373)ai(cid:374) (cid:272)usto(cid:373)ers dire(cid:272)tly, managerial preferences. Design products based on task they are intended to serve rather than customers who buy it. Monitor outside of your own industry and mainstream. Establish venture units that are independent of parent organization.
