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20 terms

ACC270chapter6

STUDY
PLAY
network effects
also known at metcalf's law, or netowkr externalitties. When the value of a product or service increases as its number of users expands
staying power
the long-term viability of a product or service
switching costs
the cost a consumer incurs when moving from one product to another. it can involve actual money spent(buying a new product) as well as investments in time any data loss and so forth
total cost of ownership (TCO)
an economice measure of the full cost of owning a product (typically computing hardware and/or software) TCO includes direct costs such as purchase price, plus indirect costs such as training support and maintenance
complementary benefits
products or services that add additional value to the primary product or service that makes up a network
plantofrms
products and services that allow for teh development and integration of software products and other complementary goods. Windows, the iphone, the Wii and the standards that allow users to create Facebook apps are all plantforms
one-sided market
a market that derives most of its value from a single class of users (instant messaging)
same-side exchange benefits
benefits derived by interaction among members of a single class of participant (the exchange value when increasing numbers of IM users gain the ability to message each other)
two-sided market
network markets comprised of two distinct categories of participant both of which that are needed to deliver value, for the network to work (video game console owner's and developers of video games)
cross-side exchange benefit
when an increase in the number of users on one side of the market (console owners) creates a rise in the other side (software developers)
monopoly
a market where there are many buyers but only one dominant seller
oligopoly
a market dominated by a small number of power*** sellers
technological leapfrogging
competing by offering a new technology that is so superior to existing offerings that the value overcomes the total resistance that older technologies might enjoy via exchange, switching cost, and complementary benefits
blue ocean strategy
an approach where firms seek to create and compete in uncontested "blue ocean" market spaces, rather than competing in spces and wayd that have attracted many, similar rivals
convergence
when two or more markets once considered distinctly separate, begin to offer features and capabilities. As an example: the markets for mobile phones and media players are converging
envelopment
when one market attempts to conquer a new market by making it an subset, compnent, or feature of its primary offerning
backward compatibility
the ability to take advantage of complementary products developed for a prior generation of technology
adaptor
a product that allows a firm to tap into the complementary products, data or user base of another product or service
the osborne effect
when a firm preannounces a forthcoming product or service and experiences a sharp and detrimental drop in sales of surrent offerings as users wait for the new item
congestion effects
when increasing numbers o users lower the value of a product or service