Sustainable competitive advantage of a system goods innovator in a market with network effects and entry threats |
Abstract:
An innovator (a firm) introducing a technology for system goods into a market with network effects canadopt various licensing strategies. The innovator's strategy spectrum could include being a monopolist foran entire system using a proprietary technology, for only a set of components, or for one of the firms in acompetitive market by licensing (opening) all of its technology to others firms. Regarding the choice ofthese strategic options, two conflicting schools of thought have emerged: network effects theory and leveragetheory. Although the former encourages the innovator to completely reveal or open its technology inorder to benefit from increased compatibility, the latter recommends the innovator to strictly withholdand protect its proprietary technology in order to avoid future competition. A few historical examples,such as the PC platform competition of IBM and Apple, suggest that neither of these extreme measureslead to business success. Therefore, a model has been developed in order to integrate these two perspectives.Our results suggest that while network effects encourage firms to open technology to a limited extent, theyshould strictly protect their “core” technological competency in order to minimize future competition. |
| Keywords: |
Network effects Leverage theory System goods Technology introduction Licensing strategy |
| Author(s): |
Seonyoung Shim, Byungtae Lee |
| Source: |
Decision Support Systems 52 (2012) 308–317 |
| Subject: |
مدیریت و انتقال تکنولوژی |
| Category: |
مقاله مجله |
| Release Date: |
2012 |
| No of Pages: |
10 |
| Price(Tomans): |
0 |
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بر اساس شرایط و ضوابط ارسال مقاله در سایت مدیر، این مطلب توسط یکی از نویسندگان ارسال گردیده است. در صورت مشاهده هرگونه تخلف، با تکمیل فرم گزارش تخلف حقوق مؤلفین مراتب را جهت پیگیری اطلاع دهید.
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