Lock-in 27#
Customers are locked into a vendor's world of products and services. Using another vendor is impossible without incurring substantial switching costs, and thus protecting the company from losing customers. This lock-in is either generated by technological mechanisms or substantial interdependencies of products or services.
Examples: Iconic Cases
How they do it: By providing the most used operating system for personal computers, Microsoft has the advantage to create an environment which prefers their other software solutions such as Internet Explorer or the Office package over competing products. Also, the programs on a Microsoft operating system are ususally not compatible with other operating systems from companies such as Apple or Linux. Hence customers have a barrier to switch to another operating system as they would loose their software programs.
Learn more about Microsoft →
How they do it: Lego parts allow individual recombination of the parts. However this recombination is only possible with other official Lego parts and no other toys. This leads to a lock-in for customers, as the size of an existing Lego collection determines also the value of new Lego products, as the recombination possibilities are increasing.
Learn more about Lego →
How they do it: Companies relying on Salesforce’s software are tied into the ecosystem. Switching to a new provider might be associated with considerable cost and efforts, and thus, customers experience a lock-in situation.
Learn more about Salesforce →
How they do it: In the beginning customers set up their initial cloud computing structure on AWS by using the free ”credits”. With an increased use of the product, the switching cost to a different solution increase as well.
Learn more about Amazon Web Services →
How they do it: Through the personal nature of a user’s Facebook network of friends, switching costs to other platforms are increased with a larger network of friends on the platform.
Learn more about Facebook →
Below, the top industries for the pattern "Lock-in" are displayed, in order to get insights into how this pattern is applied across different industries. We've collected data from 5 firms using this pattern.
Top Industries
18% of firms using pattern
14% of firms using pattern
14% of firms using pattern
All Industries
Below, the pattern "Lock-in" is analyzed based on co-occurrence, in order to get insights into how this business model pattern is applied in combination with other patterns within the firms we studied.
Top Co-Occurrences
8 pattern co-occurrences
6 pattern co-occurrences
6 pattern co-occurrences