Chapter 4 - Standards Battles and Design Dominance

Prior learning and absorptive capacity

A firm's investment in prior learning can accelerate its rate of future learning by building the firm's absorptive capacity

Network externalities

also termed positive consumption externalities, this is when the value of a good to a user increases with the number of other users of the same or similar good

Complementary goods

are additional goods and services that enable or enhance the value of another good

Increasing returns

are when the rate of return from a product or process increases with the size of its installed base. This combination will influence which technology design rises to dominance.

Dominant design

is a single product or process architecture that dominates a product category - usually 50 percent or more of the market. A dominant design is a "de facto standard" meaning that while it may not be officially enforced or acknowledged, it has become a standard for the industry

Absorptive capacity

is the ability of an organization to recognize, assimilate, and utilize new knowledge.

Installed base

is the number of users of a particular good.

Path dependency

is when end results depend greatly on the events that took place leading up to the outcome. It is often impossible to reproduce the results that occur in such a situation.