MIS 302 Chapter Notes - Chapter 6: Mcst, Switching Barriers, Network Effect
Document Summary
Staying power: how long a person believes this company will stay, networks w/ more users=more staying pwr, afraid of staying in an unwanted product. Metcalfe"s law same thing as network externalities: value=users squared. Complementary benefits: products that add additional benefits to the network, how-to-books, software, updates. Switching costs can strength network effects as an asset: can lock customers in (barnacles not butteflies, greater the switching cost, more friction for ppl to leave, e(cid:454). E(cid:448)e(cid:374) though mc t (cid:373)akes (cid:373)istakes ppl do(cid:374)"t lea(cid:448)e (cid:272)ause (cid:272)osts too (cid:373)u(cid:272)h to s(cid:449)it(cid:272)h. Blue ocean idea where instead of competing in blood-red waters where sharks of highly competitive firms fight for every available market scrap, firms should seek blue-water strategy where have uncontested, new market space: ex. Wii: works well w/ strategic positioning (being different) Please e(cid:454)plai(cid:374) : they are related, the higher the (cid:448)alue of the user"s i(cid:374)(cid:448)est(cid:373)e(cid:374)t, the (cid:373)ore the(cid:455)"ll (cid:272)o(cid:374)sider the sta(cid:455)i(cid:374)g p(cid:449)r of a(cid:374)(cid:455) offering before adopting it.
