Winning the standards race: : Building installed base and the availability of complementary goods

In markets that have forces encouraging the adoption of a dominant design, the size of a technology's installed base and the availability of complementary goods may be the most important factors determining its success or failure. This article examines the path dependent nature of technology trajectories, and the self-reinforcing effects of installed base and complementary goods. The article posits that firms can greatly influence their installed base and the availability of complementary goods through their distribution, alliance and marketing strategies. Both theory and examples are used to demonstrate how firms can manage the dynamics of technology selection in their favor.