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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.


Force Directed Circle

Minimum observation count: 1

Examples: Iconic Cases

Salesforce→ Lego→ Nestlé Nespresso→ Apple iPhone/AppStore→ Nintendo→

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: 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 →

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: 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 →



Top Industries     Pattern Co-Occurrence

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 15 firms using this pattern.


Top Industries
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Information Technology
18% of firms using pattern
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Services
15% of firms using pattern
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Consumer Goods
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
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Two-sided Market
4 pattern co-occurrences
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Digitization
4 pattern co-occurrences
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Leverage Customer Data
4 pattern co-occurrences

All Co-Occurrences


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