MIS 301 Chapter Notes - Chapter 7: Complementary Good, Osborne Effect, Oligopoly
12 Sep 2016
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Chapter 7: understanding network effects: strategies for competing in a platform-centric, Network effects: also known as metcalfe"s law, or network externalities. When the value of a product or service increases as its number of users expands. Value derived from network effects comes from: Staying power: the long-term viability of a product or service (directly related to switching costs) Switching costs: the cost a consumer incurs when moving from one product to another. It can involved actual money spent as well as investments in time, any data loss, and so forth. Total cost of ownership (tco): an economic measure of the full cost of owning a product (typically computing hardware and/or software). Tco includes direct costs such as purchase price, plus indirect costs such as training, support, and maintenance. Complementary benefits: products or services that add additional value to the primary product or service that makes up a network.
