Radical Product Innovation in Network Economies

Inhaltsangabe:Abstract:

The focus of this thesis is set on radical product introductions in network markets. It appears that these have to overcome significant impediments to reach critical mass in the form of network externalities. A literature overview of economic analysis in this field, including network types, value of networks, path dependencies and lock-ins, as well as a detailed critique of these frameworks, is provided. We then discuss several possible avenues to overcome these challenges, some of which relate to the optimal boundaries of the firm, as well as some which attempt to tackle market externalities. From these, a market based framework will be developed as a guideline for radical product introductions into network economies. We analyse business cases in light of this framework in a selection of historic examples. In addition, as we find that contradictory arguments abound in chapter three, a second approach is proposed tentatively as basis for further research.

Besides it?s theoretic approach this thesis also provides real world examples from different geographic areas, such as the U.S., Europe and Japan. A special emphasis will be put on the market of payment solutions now emerging in Europe, and, in particular, on the German start-up Paybox.net AG.

Inhaltsverzeichnis:Table of Contents:

ContentsI

AcknowledgementsIII

List of FiguresIV

List of TablesV

List of AbbreviationsVI

List of SymbolsIX

AbstractX

1.Introduction1

1.1The Business Challenge1

1.2Scope and Outline of this Thesis2

1.3Establishing an M-Payment System: The Story of Paybox.net AG4

2.The Environment: Impediments for Product Introductions6

2.1Chapter Overview6

2.2Radical Innovations and Network Economies6

Introducing a Radical Innovation6

An Introduction to Networks10

Types of Networks14

Value of Networks18

2.3"New Economics"21

Increasing Returns21

Commitment and Lock-In22

New Rules?25

2.4Market Environment for Payment Systems31

Success Factors for Payment Systems31

Cashless Payment Processes33

Potential Innovators in the Payment Arena34

Summary: Payment Systems and the Theories of "New Economics"38

3.Remedies: Tackling Network Externalities40

3.1Chapter Overview40

3.2The Radical Innovator41

The Vertical Silo41

The Atomizer42

The Independent Team44

3.3Market Success Factors46

Open System Strategies versus Proprietary Network Control46

Focusing on Niche Markets51

Expectations Management53

Favorable Resource Allocation to [¿]