Managing Network Externalities in High Tech Markets

Details

Serval ID
serval:BIB_D841A2DD73DF
Type
Article: article from journal or magazin.
Collection
Publications
Title
Managing Network Externalities in High Tech Markets
Journal
Academy of Management Executive (now: Academy of Management Perspectives)
Author(s)
Bonardi J.-P., Durand R.
ISSN
0896-3789
Publication state
Published
Issued date
11/2003
Peer-reviewed
Oui
Volume
17
Number
4
Pages
40-52
Language
english
Abstract
Many high-tech markets are characterized by network effects: situations where consumers make their decisions not simply based on the core product, but also on the quality and availability of its complements. These network effects enable the creation of a technological standard. which can lead to a strong competitive position for the core-product manufacturer. There is no guarantee, however, that this position can be sustained over time. Managers must therefore focus on further developments of the core product. We argue here that the best way to stimulate further developments is to reposition the core product in order to strengthen network effects. A three-phase framework can determine how to make an investment in the future generation of a product for which complements are crucial. First, we provide a matrix to evaluate whether the existing technology presents some untapped potential in terms of network effects, second, we analyze how to reposition the core product, third, we suggest some accompanying measures to manage this repositioning efficiently.
Keywords
Product launches, Network effect, Core competencies, Market repositioning, Market positioning, Product positioning, Marketing theory, Critical success factor, Key performance indicators, Competitive advantage
Web of science
Create date
27/11/2007 11:41
Last modification date
20/08/2019 16:57
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