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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.

Apply this pattern to your own business and create your next innovative business model!

Examples: Iconic Cases

How they do it: Gillette pioneered the system of single-use razorblades as consumables. By being the only manufacturer of razor blades compatible with its razors, customers have no choice but to buy Gilette’s razorblades once they own the razor.
Learn more about Gillette →

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: 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: 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: With purchasing Sega Dreamcast, a video game console system, customers were locked into the particular ecosystem of controllers and video games. Competitors’ video games, for instance, were not compatible with the Sega system. Therefore, owners of a Sega-console were limited to titles released for its dedicated platform.
Learn more about Sega →

Apply this pattern to your own business and create your next innovative business model!