Customer-capturing strategies: The way to replace existing technology characterized by network effects
Journal
Technovation
Journal Volume
26
Journal Issue
12
Pages
1384-1389
Date Issued
2006
Author(s)
Abstract
Network effects are the basis of competitive advantage in digital economies. Although some researchers have indicated that technologies characterized by network effects are difficult to replace, real-world situations have not confirmed this argument. Challengers still defeat market leaders in markets with network effects. The analytical results presented here include the following: (1) a proposed new concept, resilience, can describe the resistive strength of a network to challenger customer-capturing strategies, (2) three types of networks can be identified based on their resilience values, and (3) high-resilience networks possessing technology are difficult to replace. © 2005 Elsevier Ltd. All rights reserved.
Type
journal article