A discussion for diffusion strategy for a challenger in a market with network effects

Abstract

In a market where network effects exist, a firm acquiring high market share can have a competitive advantage. Once a firm successfully wins a large market share, it is difficult for other firms to diffuse their new product in the market. However, although the Microsoft OS based-PC had kept a large market share for a long time in the PC market where the network effects exist are typically at work, the Apple rapidly has increased its market share in recent years. This study attempted to reveal the factors increasing market share of the Apple and provide a new suggestion to the diffusion strategy for a challenger in a market with network effects.