From the course: Developing a Competitive Strategy
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Relationship advantage
From the course: Developing a Competitive Strategy
Relationship advantage
- For over 20 years, Microsoft has had an almost dominant market share in office productivity software. Part of the reason is that it's good software and people like it. However, it's hard to imagine that other companies, for example, Google, Apple, lack the capability or the capital needed to develop as good or even better software. So why has Microsoft continued to maintain its massive competitive advantage? A major part of the explanation lies in the fact that customers' relationship with Microsoft has become sticky. Customers have learned how to use this software and are unwilling to invest the time and effort needed by competing applications. They face high switching costs. They also know that their family, friends, and colleagues are all likely to be users of Microsoft Office. Thus they feel confident that by using Office, they can share documents without any problems. In short, Office enjoys significant competitive advantage based on high switching costs. Coke and Pepsi…
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