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)
- 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.
