From the course: Strategic Partnerships: Ecosystems and Platforms

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How networks create an advantage

How networks create an advantage

From the course: Strategic Partnerships: Ecosystems and Platforms

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How networks create an advantage

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- What is a network advantage? Essentially, it means the more the merrier. So for example, take a telephone. If I have a telephone and nobody else has a telephone, it's of zero value to anybody. When there's one other telephone in the world, maybe we can talk. But what if there are two, three, 10, 100, a million telephones? Suddenly this phone becomes much more valuable to me. That's a great example of a network advantage. Sometimes, network advantages don't come from communication type of things like a telephone. For example, an electric car. The electric cars depend on charging, right? So the more charging stations there are, the more valuable my electric car becomes, the more easy to use. And the same way, the more charging stations, the more electric cars will be purchased, and then there'll be more charging stations made. That's what called a feedback loop. One part of the process affects the other part, and they feed back on each other. Same thing like with eBay. The more buyers…

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