University:
Massachusetts Institute of Technology
Course:
15.992 | S-Lab: Laboratory for Sustainable Business
Academic year:

2023
Views:

351

Pages:

12
Author:

plazilali

Standards and Strategy: Competing in Increasingly Open Worlds Thinking about the dynamics of the strategic space Access is: Open Public Details of standards are available to all: no single firm has control over how they evolve: no charge for their use E.g. TCP/IP, HTML Closed Standards are owned and controlled by the public sector but are not freely available E.g. Cryptography Control is: Private Details of standard are made available to all: but owner has control over how the standard evolves and may charge for use E.g. Nintendo, Palm OS Technology may be standard, but details are not made available beyond the firm E.g. Landmark Graphics, IBM 360 In practice these boundaries are fuzzy: Access is: More Open More Public Control is: Linux Symbian IBM 360 CDMA More Private More Closed Windows Mercury/ Corba Conventional logic (1): What do customers prefer? Access is: More Open More Public Control is: More Private More Closed Conventional logic (2): What do producers prefer? Access is: More Open More Public Control is: More Private More Closed Wireless communications in transition Market Share Service Provision T-Mobile Orange NTT DoCoMo Vodafone Network Operation Applications Series 60-90 Value Share UI Nokia Motorola Chipset Design TI Symbian Siemens Samsung EMS Players Device Manufacture Chipset Manufacture UIQ Microsoft SavaJe Microsoft Linux Symbian Symbian Symbian Operating Systems Device Design Series 60-90 Vodafone Live!Live! Sony Ericsson Motorola Infineon I-250 and beyond Windows Microsoft Windows Clones and Asians BREW W-CDMA Qualcomm Will all markets tip? Or: Getting a standard established With Strong Network Effects Market Share Itself Creates Value Value to consumer Value of standards Driven product Conventional product Actual (or anticipated) size of the installed base If network effects are important, markets may “tip” 1 Probability the next consumer chooses to buy A 0 0 A’s share of installed base 1 28 Tipping dynamics differ with the strength of network effects Products with extensive N.effects Value to consumer Products with “threshold” network effects Conventional product Actual (or anticipated) size of the installed base Markets with moderate network effects only tip once critical thresholds are reached 1 Probability the next consumer chooses to buy from Firm A 0 1 Firm A’s actual or anticipated share of installed base Will this market tip? Market Share Service Provision T-Mobile Orange NTT DoCoMo Vodafone Network Operation Applications Series 60-90 Value Share UI Nokia Motorola Chipset Design TI Symbian Siemens Samsung EMS Players Device Manufacture Chipset Manufacture UIQ Microsoft SavaJe Microsoft Linux Symbian Symbian Symbian Operating Systems Device Design Series 60-90 Vodafone Live!Live! Sony Ericsson Motorola Infineon I-250 and beyond Windows Microsoft Windows Clones and Asians BREW W-CDMA Qualcomm