In many industries, the network of consumers using compatible products or services influences the benefits of consumption. Positive network effects arise when the consumer utility of using a product or service increases with the number of users of that product or service. The telephone system is a widely used example since it seems clear that the value of being part of the network rises as the network sizes increases. Consumption benefits can also arise in markets where a large customer network leads to increases in complementary products and services, which in turn, leads to increased consumer utility (e.g., see Farrell and Saloner 1985; Katz and Shapiro 1985;1986). Prominent examples of industries thought to exhibit network effects include automated bank teller machines, computer hardware and software, videocassette recorders, video games, and Internet web browsers. Not surprisingly, network externalities and the implications of having a large installed customer base are receiving increased attention by strategy researchers (e.g., Garud and Kumaraswamy 1993; Hill 1995; Wade 1995).
As noted by Majumdar and Venkataraman (1998), the literature related to network effects broadly tackles three categories of research questions: (1) technology adoption decisions (e.g., what factors are related to whether and when a new technology is adopted), (2) technology compatibility decisions (e.g., what factors influence a firm’s decision to seek compatibility), and (3) decisions among competing incompatible technologies (e.g., what factors are related to consumers’ choices among rival incompatible products within a single product category). While theoretical research has addressed all three of these categories, empirical research has been limited to the first and second categories of questions (e.g., see the reviews in David and Greenstein 1990; Liebowitz and Margolis 1994; Economides 2001).
Empirical efforts supporting the existence of network effects for a single product technology show that a larger network size is related to higher minicomputer sales (Hartman and Teece 1990), higher likelihood of adopting a new telecommunications technology (Majumdar and Venkataraman 1998), and quicker adoption of a new banking technology (Saloner and Sheppard 1995). In addition, Gandal (1994; 1995) and Brynjolfsson and Kemerer (1996) use a hedonic price model to show that consumers are willing to pay higher prices for software products that are compatible with the dominant product standard, i.e., the product with the larger customer network. However, with the exception of a few industry case studies (e.g., Gabel 1991; Grindley 1995; Liebowitz and Margolis 1999), we are unaware of any published studies that empirically investigate the nature of network effects in an industry with multiple competing product technologies that are incompatible.
In order to answer the question “How Do Oligopolies effect the Beverage Industry?” we must first understand what an Oligopoly is. An Oligopoly is a market form in which a market or industry is dominated by a small number of sellers. An oligopoly is much like a monopoly, in which only one company exerts control over most of a market. In an oligopoly, there are at least two firms controlling the market. So what exactly does this mean? To put this into perspective an Industry, such as the Beverage Industry, is composed of various sellers. However there are two main companies that control the Industry, they are Pepsi Co. and The Coca-Cola Company. Although there are several other companies such as
How has the use of technology changed its interaction with its suppliers? Wholesalers? Other business partners?
Synergistic gains are generated when there are a bundle of actors that can provide a higher level of value together than otherwise could have been achievable comparing the companies operating on their own (Eun and Resnick, 2007). As Homeplus expanding its business through acquiring its competitor (Homever) and convenience stores (C-Space), there were synergistic gains for Homeplus. The synergistic gains imply advantages such as shared production and product development, and expansion of market presence. Since the acquired firms (Homever and C-Space) share their product categories with Homeplus, there is a gain of larger economies of scale that can lower the production cost for Homeplus. Thus, it can be seen that the integration strategy of Homeplus generates a clear synergy.
7.Gregory Wester, Stephen Franco. The Internet Shakeout 1996. Interactive Commerce Research Bulletin. the Yankee Group, Boston, MA. December 1995
Enabling the business network effect which entails leveraging solutions designed for the networked economy to ensure interaction between all stakeholders.
Historically the personal computer (PC) industry has sold its products at reasonably high prices yet garnered only small profit margins. One reason for this is the high competition in the PC industry which led to competitive pricing among producers. Analyzing the competitive environment of the PC industry, it is evident that there is very little barrier to entry in this market. PC's have very low physical uniqueness and are made of standard components that require very little expertise to assemble.
Competition should not be enforced because it makes people feel too much stress and like winning is all that matters, makes the event too intense and no fun, and It makes people feel less skilled and lowers self-esteem. Competition does nothing but bring down a person and cause way too many problems in life. Winning and berating someone else is not all that matters and having fun in the event is.
Intragroup competition is when members within a group see their goal achievements as negatively related. This is when an individual member is acting toward his or her goals interferes and makes less effort to fulfill of another individual members goals (Na 'im, 2004).Competition in a work environment is not generally positive.It is an inventible part of an organisation which employed individuals with high aspirations and are also well driven.Competition causes unhealthy rivalry that leads to employees resenting against each other.This is because employee within groups is attempting to outperform one another prior to their performance levels.Since we live in a competitive world, an excellent performance is quite valued by most leaders and employees are being judged by it.Every individual is assessed due to their performances in comparison with every member in the work environment. However ,regardless of the way that it enables to motivate employees it likewise leads to a variety of negative effects.Because all employees want to be successful and to be rewarded this lead them to compete which therefore lead to conflict .
Rivalry among established firms is fierce. There are several factors that illustrate this: established market players (6.1). The product is highly standardized and the switching costs of the customers are low. Players are aggressive (6.2)
The following paper analyzes the initial release of Microsoft's XBOX 360 gaming system release into the United States and the changes that occurred with the supply, demand and pricing of the product in the months following its release. The social science of economics tells us that supply, demand and price are closely related to one another and have a significant on how much of a particular good is purchased and the rate at which it is purchased by consumers. The XBOX 360 phenomenon is a solid example of the impact that changes in supply, demand and price have on the marketplace and the rate at which goods are purchased.
This paper studies endogenous diffusion and impact of a cost-saving technological innovation -- Internet Banking. The bank understudy i.e. ICBC has efficiently embarked on its internet based private banking service. The vice director of e-banking felt that the entire project was an accomplishment in terms of its schema and satisfactory quality. Here is this case he needs to expound the understandings and the lessons internalized along the entire course of the project. Moreover, there were various issues which were raised during this intellectual itinerary, which included the challenges regarding computer system implementation, Information system design and most importantly the feasibility analysis. This case deals with the fact that how he confronted the challenges and developed a plan which immensely benefited bank.
To further shore up his "IT as commodity" theory, Carr cites the fact that major technology vendors, such as Microsoft and IBM, are positioning themselves as "IT utilities," companies that control the provision of business applications over "the grid." Couple this IT-as-utility trend with the rapidly decreasing cost of processing power, data storage and transmission, and even the most "cutting-edge IT capabilities quickly become available to all."
We are all born with a competitive nature. Our competitive nature drives us to want to be fierce competitors. We compete for resources in the forms of food, jobs, shelter and finding a mate to have the dominant bloodline survive. Sometimes we compete without even knowing it. This is how we grew up, competing for food at the dinner table, siblings competing for parent’s love and attention. As kids we take this competitive nature to school and compete for the best grades, teacher’s attention or sometimes we act out or we become the class clown. As adults we compete to see whose going to have the biggest home, the best cars and who makes the most money. Parents want the best for their kids and their future and will push them as far they can without seeing the repercussions later. Pushing kids beyond their limits and not allowing kids to be kids first will harm them later on in life: stun growth potential, and create insecure children who constantly seek approval.
Market structure breakdowns into various categories based on the number of sellers, type of products, and the level of market penetration. In the online streaming industry, Netflix is categorized in a monopolistic competition market. As Irvin Tucker (2010) defines, “monopolistic competition is a market structure characterized by (1) many small sellers, (2) a differentiated product, and (3) easy market entry and exit” (p.268). By using t...
The system adopted by 7-eleven maximizes the threat for new entrants. That’s means that threat of new entrants of 7-Eleven is low. It is because 7-Eleven has already reached economies of scale through maintaining a strong customer base and brand loyalty. Over the years, 7-Eleven has increases their customer and brand loyalty. The access to latest technology and capital investments in the same ensures that the barrier for entries for new entr...