Difference between revisions of "Winner-Takes-All"
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| − | + | In a winner-takes-all market, the strong get stronger and the weak get weaker. Many high tech envirobments host three kinds of players: | |
| + | * A gorilla (market leader, often more than 50% reaping 70% of the industries profits) | ||
| + | * A few chimpansees (seconds in command) | ||
| + | * Numerous monkeys | ||
| + | A winner-takes-all market have the following characteristics: | ||
| + | * High initial development costs | ||
| + | * Long habituation period for a customer (high [[Switching costs|Switching costs]]) | ||
| + | * [[Network effects|Network effects]] make a product or service more useful as the user community grows. | ||
| + | A market goal of 10% in a winner-takes-all market can be dangerous: if the company does not win a substantial piece it risks loosing everything. | ||
[[Category:marketing]] | [[Category:marketing]] | ||
Latest revision as of 19:50, 27 August 2020
In a winner-takes-all market, the strong get stronger and the weak get weaker. Many high tech envirobments host three kinds of players:
- A gorilla (market leader, often more than 50% reaping 70% of the industries profits)
- A few chimpansees (seconds in command)
- Numerous monkeys
A winner-takes-all market have the following characteristics:
- High initial development costs
- Long habituation period for a customer (high Switching costs)
- Network effects make a product or service more useful as the user community grows.
A market goal of 10% in a winner-takes-all market can be dangerous: if the company does not win a substantial piece it risks loosing everything.
