Exam 8: Understanding Network Effects: Strategies for Competing in a Platform-Centric, Winner-Take-All World

Metcalfe's Law is also known as:

Social proof is defined as the negative influence created when someone finds out that others are doing something.

Two distinctly separate markets are said to undergo convergence when they:

Which statement best describes the relationship between network effects and innovation?

___________ allows Apple to use iOS as a platform for exercise and personal health measurement.

Congestion effects often result when a key resource becomes increasingly scarce with the arrivals of more and more users.

Large firms often find new markets attractive, but might not have products ready for delivery. What strategy do such firms use to get potential adopters to delay their purchasing decisions?

Nokia is a cell phone brand that offers digital cameras as part of its cell phone products. It is now in direct competition with camera brands such as Canon and Sony, and has become the world's largest seller of cameras. This is an example of:

The higher the value of a user's overall investment, the more they are likely to consider the staying power of any offering before choosing to adopt it.

_____ is said to occur when one market attempts to conquer a new market by making it a subset, component, or feature of its primary offering.

Cross-side benefits arise due to interaction among members of a single class of participant.

You are at a packed stadium for the big game and you want to upload a photo of your team's touchdown using Instagram. Your mobile phone shows five bars of service, but you still can't access the Internet. This is likely an example of ______.

Sure, network effects are valuable, but why? List the three sources of the value (cited in our textbook & in class) that fuel the competitive advantage of network effects.

___________ allows iOS to control home products including locks, lighting, and thermostats.

A market where there are many buyers but only one dominant seller is known as a(n) _____.

_____ are products or services that add additional value to the primary product or service that makes up a network.

Startup firms that find new markets attractive but do not yet have products ready for delivery preannounce efforts causing potential adaptors to delay a purchasing decision until the new effort rolls out.

Worldwide auction leader eBay started operations in Japan just five months after Yahoo! launched its Japanese auction service. But eBay was never able to mount a credible threat and ended up pulling out of the market. This example shows that:

Explain the nature of competition in markets influenced heavily by network effects.

A market is said to be _____ if it derives most of its value from a single class of users.