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: Once a customer owns a Nintendo console, the only games compatible are the ones licensed by Nintendo itself. This means that Nintendo generates additional revenue with every game sold. It is generally not possible to run 3rd party games on the console which are not certified by Nintendo.
Learn more about Nintendo →
How they do it: Data lock-in risks become evident when you need to move your data from one software vendor’s systems or servers to another. Companies using SAP’s software are locked in to the SAP ecosystem and may face difficulities in organizational rigidity and switching costs when deciding to switch to a competitor’s system, leading to a competitive advantage of SAP.
Learn more about SAP →
How they do it: Apple has created an ecosystem of hardware and software combinations. For example can the native music app of the iPhone only be connected through the Apple software iTunes. This creates a lock-in effect, also when the user wants to synchronize other media across devices.
Learn more about Apple iPhone/AppStore →
How they do it: The more files customers have saved on their Dropbox’ file hosting space and the more devices are linked to it or the more users the space is shared with, the more effort it is to switch to another service.
Learn more about Dropbox →
How they do it: Through their Google Playstore, the company offers both content and apps for its customers. However, these can only be used on the respective environments and not be transferred to other environments. Hence, once the customer is used to the service and has purchased a lot of content or apps, the switching costs are very high.
Learn more about Google →
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