Dominant design
single product or process architecture that dominated a product category - usually 50% or more
Increasing returns
when the rate of return (not just gross returns) from a product or process increases with the size of of its installed base
primary sources of increasing returns
learning effects and network externalities
learning curve
impact of cumulative production on cost and productivity. modeled as function of cumulative output: performance increases or cost decreases with number of units of production usually at decreasing rate
absorptive capacity
ability for an organization to recognize, assimilate and utilize new knowledge
network externalities (positive consumption externalities)
when the value of a good to user increases with the number of other uses of the same or similar good
Installed Base
number of users of a particular good
Complementary Goods
additional goods and services that enable the value of another good
Path Dependency
end results depend greatly on the events that took place leading up to the outcome. often impossible to reproduce the results that occur in such a situation.
Vaporware
products that are not actually on the market and may not even exist but are advertised
network externality returns
value customers reap as a large portion of the market adopts the same good - s shaped curves
monopoly costs
costs users bear as a larger portion of the market adopts the same good - exponentially increasing
Dominant design
single product or process architecture that dominated a product category - usually 50% or more
Increasing returns
when the rate of return (not just gross returns) from a product or process increases with the size of of its installed base
primary sources of increasing returns
learning effects and network externalities
learning curve
impact of cumulative production on cost and productivity. modeled as function of cumulative output: performance increases or cost decreases with number of units of production usually at decreasing rate
absorptive capacity
ability for an organization to recognize, assimilate and utilize new knowledge
network externalities (positive consumption externalities)
when the value of a good to user increases with the number of other uses of the same or similar good
Installed Base
number of users of a particular good
Complementary Goods
additional goods and services that enable the value of another good
Path Dependency
end results depend greatly on the events that took place leading up to the outcome. often impossible to reproduce the results that occur in such a situation.
Vaporware
products that are not actually on the market and may not even exist but are advertised
network externality returns
value customers reap as a large portion of the market adopts the same good - s shaped curves
monopoly costs
costs users bear as a larger portion of the market adopts the same good - exponentially increasing