Philipp Leutiger

Radical Product Innovation in Network Economies: Lessons for M-Commerce Philipp Leutiger

Diplomarbeit, die am 15.10.2001 erfolgreich an einer Internationale Wirtschaftshochschule in Deutschland im Fachbereich Betriebswirtschaft eingereicht wurde. Abstract: The focus of this thesis is set on radical product introductions in network markets. It appears that these have to overcome significant impediments to reach critical mass in the form of network externalities. A literature overview of economic analysis in this field, including network types, value of networks, path dependencies and lock-ins, as well as a detailed critique of these frameworks, is provided. We then discuss several possible avenues to overcome these challenges, some of which relate to the optimal boundaries of the firm, as well as some which attempt to tackle market externalities. From these, a market based framework will be developed as a guideline for radical product introductions into network economies. We analyse business cases in light of this framework in a selection of historic examples. In addition, as we find that contradictory arguments abound in chapter three, a second approach is proposed tentatively as basis for further research. Besides it?s theoretic approach this thesis also provides real world examples from different geographic areas, such as the U. S., Europe and Japan. A special emphasis will be put on the market of payment solutions now emerging in Europe, and, in particular, on the German start-up Paybox.net AG. Table of Contents: |Contents|I |Acknowledgements|III |List of Figures|IV |List of Tables|V |List of Abbreviations|VI |List of Symbols|IX |Abstract|X 1.|Introduction|1 1.1|The Business Challenge|1 1.2|Scope and Outline of this Thesis|2 1.3|Establishing an M-Payment System: The Story of Paybox.net AG|4 2.|The Environment: Impediments for Product Introductions|6 2.1|Chapter Overview|6 2.2|Radical Innovations and Network Economies|6 |Introducing a Radical Innovation|6 |An Introduction to Networks|10 |Types of Net