Competing with Network Effects

October 04, 2015

Read The Full Prompt

One consequence of the digital transformation of the economy is that many industries today are exhibiting network effects.

For this module please pick ONE company/organization and discuss how networks effects may affect its value creation, value capture and/or operating model and/or how it can take advantage of network effects to grow its business.

Issues you may want to address (feel free to consider other related issues not listed below):

– How to scale up businesses that exhibit Direct Network Effects?

– How to scale up businesses that exhibit Indirect Network Effects?

– How should incumbent firms compete when their industries become susceptible to network effects?

– How can an entrant take over market leadership when competing with an incumbent in a networked industry?

– How can product-centric firms grow into platform-centric firms?
Create an approximately 500-750 word post to make your contribution. Please create appropriate tags for your post. Please also respond to and comment on three other posts per module. Feel free to use graphics, data, videos and links to other sites to corroborate your points.

Note: Since our third module is on crowd-based business models (business models that leverage collective intelligence from a large number of users), please do not pick crowd-based companies such as Kickstarter, Wikipedia, and Threadless for this OK blog post.

Submitted (138)

Symphony: Attacking a Dominate Network
AJT
Last modified on October 19, 2015 at 6:10 pm
Symphony is laying out a playbook for how dominant networks can be unbundled and supplanted.
Team Fortress 2 by Valve Software: From Product to Platform
Alexander Soley
Last modified on October 4, 2015 at 10:52 pm
How Valve's value creation keeps people playing this game years after its release.
DriveNow – A very local network
SJB
Posted on October 4, 2015 at 8:49 pm
DriveNow, is a freefloat-carsharing offering by BMW and Sixt.
ZipCar: Community-known and grown, but the stakes are higher
MR
Posted on October 4, 2015 at 3:20 pm
I was so excited to turn 21 during my senior year of college.   Of course, the bar scene in Boston was fun to experience…but so was the newfound freedom of being able to rent a car to escape campus on [...]
YouGotListings – Enhancing the Network FX of a Broken System Won’t Fix It
brandon
Posted on October 4, 2015 at 9:23 pm
A network effect can make a broken market broker.
BloomNation: Working Hard for your Peonies
Kathryn R
Last modified on October 1, 2015 at 4:45 pm
“To the love of my life – from your sexy husband Kevin” read the note accompanying a gorgeous bouquet of flowers delivered to my doorstep last Christmas. There was only one problem: while my husband is objectively sexy, his name [...]
Adtech and network effect
HelloSof
Last modified on October 4, 2015 at 7:10 pm
We're in the middle of the adtech race and a winner picking up the network effects is still not visible
Leetchi – collecting money from friends has never been easier!
Ola
Posted on October 5, 2015 at 11:42 pm
Group online payment platform revolutionizing European e-commerce
Priceline: The Travel Behemoth
AP
Last modified on October 4, 2015 at 3:34 pm
The story of how Priceline became the most valuable travel company in the world and the 3rd largest player in all of Internet commerce.
The Sims Online Should Have Taken Its Own Advice To “Be Somebody. Else.” (Or, When Networks Fight Back)
Chippydip
Posted on October 4, 2015 at 7:15 pm
What happens when a best-selling game manufacturer decides to launch an MMO with no rules and a focus on social interaction? Chaos.
StubHub: The Ticket Scalper of the Digital Age
Faisal
Last modified on October 4, 2015 at 3:42 pm
The indirect network effects present in StubHub's operating model have allowed it to create value to buyers, sellers, and ticket originators.
Bill.com – Do network features mean network effects?
BS
Posted on October 4, 2015 at 11:20 pm
Is business-to-business (B2B) payments platform Bill.com competing successfully with network effects?
Vouch – Revolutionazing Lending
JI
Last modified on October 19, 2015 at 6:10 pm
Leverage your social network to obtain better loan terms
CarMax – The way network effects should be
FB
Posted on October 4, 2015 at 8:08 pm
CarMax's business model creates network effects and it's market leader position strengthen these network effects.
Zillow: Network effects helping American to home their dreams
Charles
Posted on October 4, 2015 at 12:38 pm
How Zillow has built a platform based on the information provided by its own customers.
PlayStation: Mobilizing its way to Success
Schwas
Last modified on October 4, 2015 at 10:15 am
PlayStation leverages a strong mobilization strategy to quickly capture network effects against Xbox
Safaricom – Competing through direct and indirect network effects
Savage
Posted on October 4, 2015 at 11:24 pm
Safaricom - Strategy execution or Monopoly? Should the Government save the competition?
Styleseat: creating a two-sided platform in the fragmented beauty industry
PD
Last modified on October 1, 2015 at 11:59 am
StyleSeat has developed a two-sided marketplace for the historically fragmented beauty industry, and is betting on network effects as it prioritizes quick growth of its user base.
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