Assignment:
Can you think of an example of a successful
(a) first mover,
(b) early follower, and
(c) late entrant? What are some examples of industries not mentioned that demonstrate increasing returns to adoption?
Example of Companies that fit the Answers to the above question.
An example of a successful first mover is Apple. Apple has taken the market by storm with it iPhone, iPad and Mac product lines. When Apple introduced their version of the mobile phone, it became an overnight sensation and the profits were chart breaking. An example of an early follower is Samsung mobile. Samsung mobile began to create products such as the android phone and tablets that became very strong competition for apple products. A successful example of a late entrant is Microsoft office for mobile devices. After the success of mobile devices and the changing world of technology, users transitioned from standard home desktop computers to using laptops in their homes. When mobile phones became a household item so did the need for creating and editing those documents on those devices. Microsoft was able to implement the office suite to work successfully on the various mobile platforms.
Increasing returns to adoption says Cowan (2014) to exist when the net benefit to the user of a technology increases as the degree of adoption of that technology increases. The mechanism by which increasing returns to adoption generates market exclusion is straightforward. As adopters appear, they choose among the competing technologies in order to maximize their net benefits from the adoption decision. Some examples are those mentioned above, Apple and Samsung. Both organizations have created their own space in the market and have listened to the growing needs and demands of consumers to produce products that they will buy over and over again.
Reference: Cowan, R. (2014). "High Technology and the Economics of Standardization". Retrieved from:
https://www.cgl.uwaterloo.ac/racowan/HighTechStand.html