Published by:
University of California, Berkeley
Length: 26 pages
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Abstract
Competition in the information age often takes the form of a standards war: a battle for market dominance between incompatible technologies. A company''s success or failure can easily hinge on its ability to wage such a standards war. Standards wars are especially bitter in markets with strong network effects, where consumers place great value on compatibility and interconnection with each other. These markets tend to exhibit positive feedback and ''tip'' to a single winner. Based on a study of dozens of standards wars going back over 100 years, this article offers a ''battle guide'' for waging a standards war. After classifying standards wars and identifying seven key assets that firms can use to successfully establish a new technology, the authors recommend three tactics in standards battles: building alliances, exploiting first-mover advantages, and managing consumer expectations.
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Abstract
Competition in the information age often takes the form of a standards war: a battle for market dominance between incompatible technologies. A company''s success or failure can easily hinge on its ability to wage such a standards war. Standards wars are especially bitter in markets with strong network effects, where consumers place great value on compatibility and interconnection with each other. These markets tend to exhibit positive feedback and ''tip'' to a single winner. Based on a study of dozens of standards wars going back over 100 years, this article offers a ''battle guide'' for waging a standards war. After classifying standards wars and identifying seven key assets that firms can use to successfully establish a new technology, the authors recommend three tactics in standards battles: building alliances, exploiting first-mover advantages, and managing consumer expectations.