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: 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 →
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 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 →
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: Nespresso coffee system is protected by more than 100 patents. This allowed the company to keep competitors from selling coffee capsules compatible with the Nespresso system. However in recent years some patents expired leading to multiple brands manufacturing and selling Nespresso compatible coffee capsules.
Learn more about Nestlé Nespresso →
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