BU111 Lecture Notes - Lecture 20: Session 9, Disruptive Innovation, Profit Margin
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Vicious cycle: looks at products in technology and their factors that make them successful or not. Looks at what can be done to help these products: example: xbox- has a small installed base, leads to fewer complimentary goods. People are not going to make games for a thing that has a small user base (installed base). This means that the product is less appealing. More development of the product will lead to more value of the product because it has a bigger installed base, more compliments. Installed base: # of people that use your product. Complimentary good: things that enhance your product: example: apps for a phone, games for an xbox. Example of vicious cycle: blackberry phones- complimentary good= cases, using apps. Example of virtuous cycle: snapchat- its an appealing product, huge user base iphone vs blackberry: more people (cid:271)u(cid:455)i(cid:374)g ipho(cid:374)es, less people (cid:271)u(cid:455)i(cid:374)g (cid:271)la(cid:272)k(cid:271)e(cid:396)(cid:396)(cid:455)"s. Application: say that you are coming out with your own tablet.
