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What is Network Externality

Handbook of Research on Strategic Fit and Design in Business Ecosystems
Network externalities are the effects a product or service has on a user while others are using the same or compatible products or services.
Published in Chapter:
Platform Strategy for New Product Development: The Mediating Effect of Product Platform Strategy in the Korean High Technology Industry
Sang-Wuk Ku (Pai Chai University, South Korea)
DOI: 10.4018/978-1-7998-1125-1.ch006
Abstract
This chapter proves the mediating effect of product platform strategies on the relationship between a firm's subject, environment, and resources and the performance of new product development in the perspective of platform leadership. The author analyzed the mediating role of product platform strategy by considering CEO propensity, competition and customers, and competitiveness of retained resources. Compared to the past, in the perspective of platform leadership, the product platform strategy has a critical effect on the relationship between the business scope of a platform leader, the external relationship with complementors, and the internal organization of a platform leader impact on the performance of new product development. As a result of hierarchical regression analysis with the data of Korean high technology companies, the product platform strategy would be mediating the relationship between the antecedents such as CEO propensity, competition and customers, and competitiveness of retained resources and NPD performance.
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Theoretical Perspectives on Social Shopping
The increase in the value of a product or service to a user, not because of the inherent quality of the product or service, but because of the increasing numbers of other users adopting it ( Katz & Shapiro, 1985 ).
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