Intergenerational Competitive Strategies for Industry Standards

Abstract

This paper first presents the following as obstacles to the generational switch of industry standards: (1) magnitude of installed base, (2) ample scope for technological progress based on existing standards, (3) limited applicability of accumulated technology to new standards, and (4) lack of investment capability. Next, we examine strategies to overcome such obstacles and migrate to new standards. Finally, we analyze the cooperation between a company that advocates new standards and one that produces complementary products when implementing those standards through the case study of the family console game industry. The results of analysis demonstrate that Nintendo has a traditional self-reliance strategy, whereas new entrant Sony has a collaborative one.

Keywords

• de facto standard
• intergenerational competitive strategy
• network externality
• console game
• nintendo