Competition in the information age often takes the form of a standards war: a battle for market dominance between incompatible technologies. A company’s success or failure can easily hinge on its ability to wage such a standards war. Standards wars are especially bitter in markets with strong network effects, where consumers place great value on compatibility and interconnection with each other. These markets tend to exhibit positive feedback and “tip” to a single winner. Based on a study of dozens of standards wars going back over 100 years, this article offers a “battle guide” for waging a standards war. After classifying standards wars and identifying seven key assets that firms can use to successfully establish a new technology, the authors recommend three tactics in standards bat…
Competition in the information age often takes the form of a standards war: a battle for market dominance between incompatible technologies. A company’s success or failure can easily hinge on its ability to wage such a standards war. Standards wars are especially bitter in markets with strong network effects, where consumers place great value on compatibility and interconnection with each other. These markets tend to exhibit positive feedback and “tip” to a single winner. Based on a study of dozens of standards wars going back over 100 years, this article offers a “battle guide” for waging a standards war. After classifying standards wars and identifying seven key assets that firms can use to successfully establish a new technology, the authors recommend three tactics in standards battles: building alliances, exploiting first-mover advantages, and managing consumer expectations.
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... Nonmarket activities serve to beneficially influence the rules and norms of engagement within the market environment (Schaumann & Tarnovskaya, 2023;Storbacka, 2019), thereby protecting the focal firm’s interests and potentially enhancing its economic performance (Baron, 2010;Feldman & Hernandez, 2022;Mellahi et al., 2016;Yoffie & Bergenstein, 1985). For example, nonmarket efforts to shape industry standards seek to establish favorable conditions by institutionalizing elements inherent to their value proposition (Shapiro & Varian, 1999;Thomas, 1965;Thompson, 1954). An example is when firms like IBM and Hewlett-Packard formed a consortium in the 1980s to promote their standards as a countermeasure against the widespread adoption of AT&T’s proprietary operating system (Weiss & Cargill, 1992). ...
... An example is when firms like IBM and Hewlett-Packard formed a consortium in the 1980s to promote their standards as a countermeasure against the widespread adoption of AT&T’s proprietary operating system (Weiss & Cargill, 1992). Such instances are sometimes referred to as “standards wars” (Shapiro & Varian, 1999), highlighting how firms battle to protect their market interests in arenas beyond their immediate operational environments. ...
We contribute to the literature on defensive market shaping, nonmarket strategy, and ecosystem orchestration, by exploring the case of an incumbent multinational corporation in the building industry that has successfully influenced regulations to safeguard its market position. We show that business ecosystems can be developed as a result of lead firms’ nonmarket concerns rather than by immediate market objectives, something which has not previously been documented. We inductively develop a series of propositions to illustrate how lead firms govern such ecosystems, what motivates ecosystem membership, how value is created and appropriated in the ecosystem, and what perceived challenges are faced by members. We show that the scale and diversity of ecosystem actors empower firms to successfully lobby policymakers and influence industry standards. We also find that while open standards are associated with higher dissemination and market-oriented value creation in the ecosystem, they make value appropriation more difficult for individual members. Furthermore, greater diversity leads to greater differentiation of goals and activities within the ecosystem. Perceived ecosystem value therefore also depends on efficient integration and the provision of shared resources and the salience of nonmarket issues. This creates a need for efficient ecosystem governance and orchestration, but a democratized central ecosystem governance may lead to bottlenecks and slower decision-making.
... By gathering knowledge and resources from members, standard setting committees frame the normative rules that regulate the features of the product in the market and the behavior of firms during their production [3] . Existing research have fully discussed public benefit of establishing standards from the regulation functions and social improvements, the key mechanisms includes uncertainty reduction, network externalities [4] , economy of scale [5] . ...
... Digitising products has led to smart devices that blur traditional industry boundaries (Yoo et al., 2024). By the 2000s, IT evolved from supporting to becoming the business, especially for digital-native firms like Google (Henderson and Venkatraman, 1999;Shapiro and Varian, 1999;Yoo et al., 2024). Digital assets fueled new markets, including software, data, and cloud services (Giustiziero et al., 2023). ...
Digital Innovation is now a prerequisite for competitive advantage, yet research still lacks an integrated explanation of the forces that accelerate or impede its progress. Drawing on a structured literature review, we identify five socio-technical catalysts-Data Objects, Layered Modular Architecture, Product Design, IT and Organisational Alignment, and Platform Ecosystems-and syn-thesise how each simultaneously stimulates Digital Innovation and introduces countervailing tensions. Our framework clarifies these trade-offs: data monetisa-tion raises privacy concerns; modular architectures can fragment under rigid interface rules; meaning-changing product design risks user confusion; alignment efforts stall when legacy cultures persist; and platform network effects drift toward market centralisation. By mapping these interdependencies, the study equips scholars with a consolidated analytical lens and guides managers in balancing opportunity and risk during a Digital Innovation process.
... Firms often compete to have their standard become the default (or only) solution for a particular technical product. Common strategies for winning standards wars include assembling allies, preempting competitors by moving early into markets, active communication with customers, and producing complementary products once a standard starts having success (Shapiro & Varian, 1999). ...
Technical standards are sets of rules or specifications that enable specific types of connections, interrelations, and behaviors. Technical standards are central to modern societies and technical systems. This paper provides an overview of technical standards as a topic of interest for people in information science and related fields. It takes a critical‐analytic view of standardization and examines technical standards as artifacts produced by people for specific purposes. The paper presents interdisciplinary viewpoints to discuss key aspects of the literature, including how standards reflect political, financial, and cultural motivations, how standards are often implemented in different ways, challenging their effectiveness, and how standards structure work as much as they structure information. These various disciplinary perspectives are also used to highlight standardization issues related to emerging technologies, such as social media and generative artificial intelligence. This review highlights how standards remain key topics for information scholars, professionals, and institutions as societies, economies, and infrastructures continue to interconnect across the globe.
The European Union’s (EU’s) Digital Markets Act (DMA) is a milestone in the entangled path of regulating the increasing economic power of gatekeepers (e.g. Google, Amazon.com, Microsoft); however, it poses blind spots about its effectiveness with reference to two aspects. The first blind spot consists of not considering that the economic power of gatekeepers comes from multiple sources involving different levels of competition (i.e. within and between platforms). The second blind spot descends from the first one; each source of gatekeepers’ economic power is linked to rents of a different nature: monopolistic, Ricardian or Schumpeterian. However, the DMA does not distinguish the different natures of rents, instead treating all rents extracted by gatekeepers as homogeneous. These intertwined blind spots may provoke paradoxical effects on the main goal pursued by the DMA itself—namely, promoting contestable, fair and innovative digital markets. In contrast with works emphasising the strengths of the DMA in protecting competition in digital markets, the present research unveils these two blind spots affecting the DMA. First, this research analyses the different sources of economic power wielded by gatekeepers and the respective levels of competition to which the DMA refers. Second, it adopts the theoretical lens of the nature of rents to assess the effects of the DMA’s obligations on the effectiveness of its principles: contestability, fairness and innovativeness. Third, it provides implications for policymakers and theoretical insights for investigating the gap between the DMA’s intentions and results.