This preview shows page 1. Sign up to view the full content.
Unformatted text preview: t he U. S. Video Game Cons ole
Indus t ry, ” California Management Review, Sp ring 2003. This last no te is a critical po int to any newco mer wishing to attack an established rival. Winning
custo mers away f ro m a do minant player in a netwo rk industry isn’t as easy as o f f ering a pro duct o r
service that is better. Any pro duct that is inco mpatible with the do minant netwo rk has to exceed
the value o f the technical f eatures o f the leading player, plus (since the newco mer likely starts
witho ut any users o r third-party pro duct co mplements) the value o f the incumbent’s exchange,
switching co st, and co mplementary pro duct benef it (see Figure 6.1). And the incumbent must no t
be able to easily co py any o f the newco mer’s valuable new inno vatio ns; o therwise the do minant
f irm will quickly match any valuable impro vements made by rivals. As such, t ech nological
leapf rogging, o r co mpeting by o f f ering a superio r generatio n o f techno lo gy, can be really
to ugh.M. Schilling, “Techno lo gical Leapf ro gging: Lesso ns f ro m the U.S. Video Game Co nso le Industry,” Califo rnia Management Rev iew , S...
View Full Document
- Winter '14