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.
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.
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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.
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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.
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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.
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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.
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