DTS - Week 2 (MC & Case)

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Questions and Answers

What is a critical risk of focusing intensely on both Apps Market Competition (AMC) and Apps Exclusivity?

It encourages platforms to over-prioritize niche markets.
It creates an imbalance in the platform's pricing strategy.
It limits the scalability of indirect network effects.
It causes developers to face conflicting incentives, reducing application quality. (correct)

How does intermediate distinctive positioning typically affect platform performance?

It attracts niche audiences but risks losing mass market appeal.
It enhances platform performance through balanced differentiation.
It strengthens network effects by creating broad appeal.
It leads to ambiguous positioning, which reduces market share and performance. (correct)

Which of the following is an effective strategy to overcome the Chicken-and-Egg Problem?

Increase transaction fees to ensure early platform profitability.
Focus solely on direct network effects.
Subsidize one side of the market to attract the other side. (correct)
Limit the number of developers on the platform to control quality.

Which factor is most critical for late entrants to succeed in platform-based markets against incumbents?

Leveraging strong indirect network effects and shaping consumer expectations. (B) Signup and view all the answers

What differentiates indirect network effects from direct network effects?

Indirect network effects arise from complementary goods, while direct network effects depend on user-to-user interactions. (D) Signup and view all the answers

In the context of Winner-Takes-All (WTA) markets, which scenario is most likely to occur?

A dominant platform captures the majority of market share due to strong network effects. (B) Signup and view all the answers

What role does consumer expectations play in platform adoption for late entrants?

It shapes the perception of future platform success, directly affecting user adoption. (C) Signup and view all the answers

Which trust-building mechanism is most effective for platforms attempting to attract both users and developers?

Offering transparent pricing and reliable dispute resolution mechanisms. (B) Signup and view all the answers

Why is balancing high Apps Market Competition (AMC) with Exclusivity Agreements challenging for platforms?

It creates a conflict for developers, reducing innovation and quality. (B) Signup and view all the answers

In a platform's strategic growth phase, which of the following tactics best addresses the Penguin Effect?

Securing exclusivity agreements with marquee users. (D) Signup and view all the answers

High-Fi Tunes is a new music streaming platform that emphasizes ultra-high-quality audio and offers exclusive content from a few niche artists in jazz and classical music. However, they also allow independent artists to upload their music freely, aiming to create a broad library. Despite these efforts, they are struggling to grow their user base and attract popular mainstream artists. What strategic issue is High-Fi Tunes likely facing?

A conflicting balance between Apps Market Competition (AMC) and Apps Exclusivity. (A) Signup and view all the answers

Streamerly is a new video streaming platform entering a market dominated by Netflix and Disney+. They offer niche documentary content and have secured exclusive rights to several award-winning films. However, their platform lacks a wide range of mainstream movies, and most consumers are unaware of their existence. What strategy could help Streamerly improve their market position?

Focus on improving indirect network effects by attracting complementary content providers. (B) Signup and view all the answers

PlayFlex is a gaming platform that competes with established players like Steam. To attract users, they offer significant discounts on popular games and allow indie developers to upload games freely. Despite these efforts, they struggle to retain users because major gaming studios continue to release exclusives on Steam. Why is PlayFlex struggling in this scenario?

They focused too heavily on Apps Market Competition without securing exclusivity. (B) Signup and view all the answers

Artly Connect is a platform for connecting freelance artists with clients. They rely on indirect network effects, as more clients joining the platform attract more artists, and vice versa. To incentivize adoption, they provide discounts to new users but have yet to achieve significant growth. Which tactic could help Artly Connect overcome the Chicken-and-Egg Problem?

Subsidize the artist side to ensure a diverse pool of creators for clients. (A) Signup and view all the answers

StreamSmart is a small live-streaming platform trying to compete with Twitch. They target esports fans and streamers but lack strong features like user chatrooms and moderation tools. Users complain about slow responses to disputes and unclear pricing for premium features. What is StreamSmart's primary challenge, and how can they address it?

Lack of trust-building mechanisms; improve transparency and dispute resolution. (D) Signup and view all the answers

Flashcards

Chicken-and-Egg Problem

A situation where a platform struggles to attract both users and developers due to a lack of initial activity on either side.

Apps Market Competition (AMC)

Platform growth strategy focused on attracting a wide range of users and developers.

Apps Exclusivity

Platform growth strategy focused on attracting specific, high-value users and developers.

Balancing AMC and Exclusivity

A conflict that arises when a platform tries to balance attracting a wide range of users and developers (AMC) with securing exclusive deals (Exclusivity).