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20 Cards in this Set
- Front
- Back
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network effects
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Metcalfe's Law, network externalities, when the value of a product or service increases as its number of users expands
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staying power
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long-term viability of a product or service
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switching costs
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cost a consumer incurs when moving from one product to another, it can involve actual money spent as well as investments in time, any data loss, and so forth
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TCO (total cost of ownership)
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economic measure of the full cost of owning a product (typically computing hardware and/or software); includes direct costs such as purchase price, plus indirect costs such as training, support, and maintenance
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complementary benefits
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products or services that add additional value to the primary product or service that makes up a network
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platform
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products or services that allow for the development & integration of software products & other complementary goods; windows, the iPhone, the Wii, & the standards that allow users to create Facebook apps are all platforms
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one-sided market
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market that derives most of its value from a single class of users
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same-side exchange benefits
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benefits derived by interaction among members of a single class of participant (i.e. the exchange value when increasing numbers of IM users gain the ability to message each other)
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technological leap-frogging
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competing by offering a new technology that is so superior to existing offerings that the value overcomes the total resistance that older technologies might enjoy via exchange, switching cost, & complementary benefits
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blue ocean strategy
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approach where firms seek to create & compete in uncontested "blue ocean" market spaces, rather than competing in spaces & ways that attracted many, similar rivals
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convergence
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when two or more markets, once considered distinctly seperate, begin to offer features & capabilities
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envelopment
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when one market attempts to conquer a new market by making it a subset, component, or feature of its primary offering
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backward compatibility
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ability to take advantage of complementary products developed for a prior generation of technology
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adaptor
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product that allows a firm to tap into the complementary products, data, or user base of another product or service
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The Osborne Effect
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when a firm preannounces a forthcoming product or service & experiences a sharp & detrimental drop in sales of current offerings as users wait for the new item
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congestion effects
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when increasing numbers of users lower the value of a product or service
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two-sided market
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Network markets comprised of two distinct categories of participant, both of which that are needed to deliver value for the network to work (e.g., video game console owners and developers of video games).
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cross-side exchange benefits
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When an increase in the number of users on one side of the market (say console owners) creates a rise in the other side (software developers)
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monopoly
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A market where there are many buyers but only one dominant seller
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oligopoly
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A market dominated by a small number of powerful sellers
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