2,970 research outputs found

    Adoption of e-business: patterns and consequences of network externalities

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    The paper analyzes the adoption of various e-business technologies. Strong empirical evidence is found for the existence of increasing returns to adoption due to indirect network externalities between related technologies. If a company is close to the technological frontier, its probability of adoption increases. The empirical analysis is based on more than 5,000 observations from a cross-sectional European enterprise survey conducted in June 2002. A classification and regression tree (CART) is used to illustrate technological complementarities and their effect for the adoption probability of a firm. --Technology Adoption,Path Dependence,Classification Trees

    Some Ambiguities Concerning the Development of Electronic Money

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    The aim of this paper is to analyse the economic efficiency of electronic money and to identify different factors hindering its growth. It is argued that electronic money might eventually make paper money obsolete. Nevertheless, prospects for the development of this monetary innovation remain uncertain due to the complexity and ambiguity of electronic money products. In particular, the paper identifies network effects and habit persistence as major factors hindering the adoption and more widespread use of electronic money.e-money, ICT, network externalities, habit persistence.

    Information Technology and India’s Economic Development

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    This paper discusses the possibilities for broad-based IT-led economic growth in India, including increasing value-added, using better telecom links to capture more benefits domestically through offshore development for developed country firms, greater spillovers to the local economy, broadening the IT industry with production of telecom access devices, improving the functioning of the economy through a more extensive and denser communications network, and improving governance. We also examine the policy environment, arguing that government policy is better focused on removing labor market distortions and infrastructure constraints, rather than providing output or export subsidies to the software industry.information technology, software, complementarities, telecommunications

    Determinants of ICT Adoption: Evidence from Firm-Level Data

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    We analyse factors driving ICT adoption at firm level using data from Irish manufacturing firms over the period 2001-2004. Our results indicate that the adoption of ICT has been uneven across firms, industries and space. On average, other things equal, firms with more skilled workers, firms operating in ICT-producing and ICT-using industries, and firms located in the capital city region have been relatively more successful in adopting and using ICT. We find positive technology spillovers from firms that have adopted ICT located in the same region and industry. To a certain extent, patterns of ICT adoption are different for domestic and foreign-owned firms, in particular with respect to the effects of international competitive pressure and firm size.Human capital/ICT adoption/Industrial structure/Technology spillovers

    Co-ordination and Lock-in: Competition with Switching Costs and Network Effects

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    Switching costs and network effects bind customers to vendors if products are incompatible, locking customers or even markets in to early choices. Lock-in hinders customers from changing suppliers in response to (predictable or unpredictable) changes in effciency, and gives vendors lucrative ex post market power-over the same buyer in the case of switching costs (or brand loyalty), or over others with network effects. Firms compete ex ante for this ex post power, using penetration pricing, introductory offers, and price wars. Such "competition for the market" or "life-cycle competition" can adequately replace ordinary compatible competition, and can even be fiercer than compatible competition by weakening differentiation. More often, however, incompatible competition not only involves direct effciency losses but also softens competition and magnifies incumbency advantages. With network effects, established firms have little incentive to offer better deals when buyers’ and complementors’ expectations hinge on non-effciency factors (especially history such as past market shares), and although competition between incompatible networks is initially unstable and sensitive to competitive offers and random events, it later "tips" to monopoly, after which entry is hard, often even too hard given incompatibility. And while switching costs can encourage small-scale entry, they discourage sellers from raiding one another’s existing customers, and s also discourage more aggressive entry. Because of these competitive effects, even ineffcient incompatible competition is often more profitable than compatible competition, especially for dominant rms with installed-base or expectational advantages. Thus firms probably seek incompatibility too often. We therefore favor thoughtfully pro-compatibility public policy.

    Analysis of google entry in unified communications from a resource and competence perspective

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    The business communications market has been deeply transformed by technological and product convergence, due to the progressive substitution of traditional TDM-based voice products and services by ToIP (Telephony over IP) based products and services. The adoption of IP and the management of voice applications in the same way as data application has given rise to convergence offerings under the name of Unified Communications, and allowed the entry of data communications vendors, such as Cisco, in a market initially dominated by TDM-based product vendors. The increasing dissociation between hardware and software and the virtualisation of services have induced the entry of new players relying on their position in software and web services, among which Microsoft and Google. In this paper, drawing on the resource-based perspective, we analyse the patterns of entry of Google in this market. In particular, we highlight how Google relies on current specific resources, acquire and/or develop complementary resources in order to be able to compete on this market. In this work in progress paper, we put emphasis on the acquisition strategy of Google --

    Information Technology Product Bundling in the Presence of Complementarities, Quality Uncertainty, and Network Effects: An Agent-Based Approach

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    Bundling of information technology products and services is prevalent in markets for information goods, telecommunication services, computer hardware, and software goods. However, factors affecting consumers’ choice of IT product bundles, and the resultant impacts to markets, have not been clearly documented in the information systems literature. In this paper, we develop agent-based simulation models to examine the effects of bundle component quality uncertainty (in either the focal or supplement components), bundle component complementarity (complementary or noncomplementary bundles), and network effects (global market shares or local social network interaction effects) on agents’ choices of product bundles. In addition, we also examine different effects of agents’ risk preferences (risk-aversion, risk-neutrality, and risk-seeking) on their choices of product bundles. Finally, we differentiate the impact of network effects and agents’ risk preferences on bundle choices depending on two types of agent preferences for bundle attributes: homogeneous or heterogeneous preferences. Our findings indicate that global market share network effects have a significant influence on risk-averse and risk-neutral agents’ choice of different product bundles. Market share network effects do not seem to have much influence on bundle choices among risk-seeking agents. Interestingly, our simulation results also indicate that social network interaction effects on a local scale have greater effects on bundle choices of risk-averse and risk-neutral agents, compared to the market share network effect. Our overall results also indicate that agents have the highest preference for complementary product bundles with a good, certain quality focal item than for other types of product bundles. From our research findings, implications for research and practice are presented

    Designing your future business model: An activity system perspective

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    Building on the received literature, we conceptualize a firm's business model as a system of interdependent activities that transcends the focal firm and spans its boundaries. The activity system enables the firm to create value in concert with its partners but also to appropriate a share of the value created. Anchored on theoretical and empirical research, we suggest two sets of parameters that activity systems designers need to consider: design elements - content, structure and governance - that describe the architecture of an activity system; and design themes - novelty, lock-in, complementarities and efficiency - that describe the sources of the activity system's value creation.Business model; activity system; design;

    Network strategies for the new economy

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    In this paper we argue that the pace and scale of development in the information and communication technology industries (ICT) has had and continues to have major effects on the industry economics and competitive dynamics generally. We maintain that the size of changes in demand and supply conditions is forcing companies to make significant changes in the way they conceive and implement their strategies. We decompose the ICT industries into four levels, technology standards, supply chains, physical platforms, and consumer networks. The nature of these technologies and their cost characteristics coupled with higher degrees of knowledge specialisation is impelling companies to radical revisions of their attitudes towards cooperation and co-evolution with suppliers and customers. Where interdependencies between customers are particularly strong, we anticipate the possibility of winner-takes-all strategies. In these circumstances industry risks become very high and there will be significant consequences for competitive markets

    Designing Scalable Business Models

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    Digital business models are often designed for rapid growth, and some relatively young companies have indeed achieved global scale. However despite the visibility and importance of this phenomenon, analysis of scale and scalability remains underdeveloped in management literature. When it is addressed, analysis of this phenomenon is often over-influenced by arguments about economies of scale in production and distribution. To redress this omission, this paper draws on economic, organization and technology management literature to provide a detailed examination of the sources of scaling in digital businesses. We propose three mechanisms by which digital business models attempt to gain scale: engaging both non- paying users and paying customers; organizing customer engagement to allow self- customization; and orchestrating networked value chains, such as platforms or multi-sided business models. Scaling conditions are discussed, and propositions developed and illustrated with examples of big data entrepreneurial firms
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