Chapter 8 Flashcards
network effects
how the value that a user derives from a network is related to the number of users in the network (Metcalfe’s law = V~n^2)
positive network effect
Mercalfe’s law
negative network effect
congestion effect
congestion effect
each additional user lowers the value of the network
Addition value for Network effects
- staying power
- exchange
- complementary benefits
Application Programming Interfaces
programming guidelines that tell other programs how to execute a certain task like retrieving information from the platform
one-sided markets
value is created for one single group of users
same-side exchange benefit
ensure that the value for a group of users increases due to an increase in the number of users of the same group
two-sided markets
value is created from two groups of network users
cross-side exchange benefits
an increase in one group of users cause an increase in value of the other group
positive feedback loops
occur when an increase in A leads to an increase in B which again leads to an increase in A and so on
technological leapfrogging
offering a new technology that is so superior to the old that its value exceeds the value of the network effects and technological functionality of the old technology
blue ocean strategies
firms seek to create and compete in new markets rather than competing in the existing markets
convergence
two or more markets once considered distinctly separate begin to offer similar features and capabilities
envelopment
where one market attempts to conquer a new market by making it a subset, component or feature of its primary offerings
