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: 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.
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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: 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: 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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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