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

What are the primary sources of value for network effects? Give a brief description of how each of these factors provides value for network effects.

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.

The video game console market offers important lessons for the strategist. The video game console market is a network market in which Sony's PlayStation 2 (PS2) dominated over Microsoft's Xbox offering. This has been possible due to:

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

Cisco purchased Pure Digital, maker of the Flip video recorder, but ended up shutting the unit down a little over two years later. The reason for Cisco's failure was:

Envelopment is a management strategy where a dominant firm acquires all the layers in its value chain to increase profitability.

_____ 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.

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:

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