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 [...]