An industry battle between incompatible product formats can occur if competing firms selling sets...

Question:

An industry battle between incompatible product formats can occur if competing firms selling sets of _____ products fail to take into account _____ effects.

Industry:

An industry is defined as a group of businesses and manufacturers that produce different types of products or items. The four types of industries are:

  • Primary Industry
  • Secondary Industry
  • Tertiary Industry
  • Quaternary Industry

Answer and Explanation:


The network effect plays an important role in firms. Consider two firms that have two complementary products A and B. If the products are incompatible to each other, then there are the chances of industry battle. This situation can be eliminated by taking into account the network effect.

Thus, an industry battle between incompatible product formats can occur if competing firms selling sets of complementary products fail to take into account network effects.


Learn more about this topic:

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Industry Analysis for Business Plans

from Business Analysis Training

Chapter 4 / Lesson 6
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