Short instruction
Many markets are characterized by increasing returns to adoption which result in single de facto standards that are dominating. Sources of increasing returns include direct and indirect network effects. In these markets, standards battles are often fought. Scholars have focused on why certain standards dominate over other standards. They have come up with factors that affect standard dominance. Teachers who cover the de-facto standardisation process can teach students how firms can utilize strategies to set dominant standards. When firms apply these factors to the battles in which they participate, the uncertainty for firms with respect to the decision that they must make for which standard to choose will decrease.
The ILOs examples
S5.2., S7.3., S7.7.
Recommended Teaching Case studies/Serious games/Оther
1. Case Studies
- Gallagher, S. R. (2012). The battle of the blue laser DVDs: The significance of corporate strategy in standards battles. Technovation 32(2): 90-98.
- Van de Kaa, G., & H. De Vries (2015). Factors for winning format battles: A comparative case study. Technological Forecasting & Social Change 91(2): 222-235.
- Van de Kaa, G., et al. (2015). Strategies in network industries: The importance of inter-organizational networks, complementary goods, and commitment. Technology Analysis & Strategic Management 27(1): 73-86.
2. Teaching Game
Video gaming platform wars:
https://mitsloan.mit.edu/teaching-resources-library/platform-wars-simulating-battle-video-game-supremacy
Good practice
Students are interested in understanding the factors that affect standards dominance and thereby understanding the specifics of standards battles. In lectures, it is recommended to explain the factors by making use of the example case studies that were published in the literature and for each case study cover one or more factors that were relevant in that case. After these lectures, students like to play a game and apply the factors.
Recommended sources
- Schilling, M. A. (2020). Strategic management of technological innovation. New York, USA, McGraw-Hill.
Other sources relevant to the topic:
- David, P. A. (1985). "Clio and the economics of QWERTY." American Economic Review 75(2): 332-337.
- Gallagher, S. R. and S. H. Park (2002). Innovation and competition in standard-based industries: A Historical Analysis of the U.S. Home Video Game Market.
- IEEE Transactions on Engineering Management 49(1): 67-82.
- Schilling, M. A. (1998). Technological lockout: An integrative model of the economic and strategic factors driving technology success and failure. Academy of Management Review 23(2): 267-284.
- Shapiro, C. and H. R. Varian (1998). Information rules, a strategic guide to the network economy. Boston, Massachusetts, Harvard Business School Press.
- Suarez, F. F. (2004). "Battles for technological dominance: An integrative framework." Research Policy 33(2): 271-286.
- Van de Kaa, G. and H. De Vries (2015). "Factors for winning format battles: A comparative case study." Technological Forecasting & Social Change 91(2): 222-235.
- Van de Kaa, G., et al. (2011). "Factors for winning interface format battles: A review and synthesis of the literature." Technological Forecasting & Social Change 78(8): 1397-1411.