Factors Affecting Business Success The network effect Total value of a product, service, or technology grows as more and more people use it telephone system example Single telephone has no value; as more people join the telephone system, the value of each telephone increases laobao online shop eXample As more people participate, the online C2C site becomes more valuable to buyers and sellers Creating a Winning E-Business 16 Second Edition Chapter 2
Creating a Winning E-Business Second Edition, Chapter 2 16 Factors Affecting Business Success ▪ The network effect – Total value of a product, service, or technology grows as more and more people use it • Telephone system example – Single telephone has no value; as more people join the telephone system, the value of each telephone increases • Taobao online shop example – As more people participate, the online C2C site becomes more valuable to buyers and sellers
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Creating a Winning E -Business Second Edition, Chapter 2 17
Group Reading Discussion E-Case A Network Effect backlash Who think the third voice e-business idea was a good one? Who do not? Discuss the role the network effect played in the early success and later failure of Third Voice Creating a Winning E-Business 18 Second Edition Chapter 2
Creating a Winning E-Business Second Edition, Chapter 2 18 Group Reading & Discussion ▪ E-Case: A Network Effect Backlash ▪ Who think the Third Voice e-business idea was a good one? Who do not? ▪ Discuss the role the network effect played in the early success and later failure of Third Voice