BU415 Midterm: MIS Test Review.docx
Document Summary
Technology note questions (5 marks) (just pick one tech note and learn it) When network effects are present, the value of a product or service increases as the number of users grows. Network effects are among the most powerful strategic resources that can be created by technology based innovation. Many category-dominating organizations and technologies, including microsoft, apple, nasdaq, ebay, facebook, and visa, owe their success to network effects. Network effects are also behind the establishment of most standards, including blu-ray, The value derived from network effects comes from three sources: exchange, staying power, and complementary benefits. Exchange - facebook for one person isn"t much fun, and the first guy in the world with a fax machine didn"t have much more than a paperweight. But as each new facebook friend or fax user comes online, a network becomes more valuable because its users can potentially communicate with more people. These examples show the importance of exchange in creating value.
