Corporate IT Standardization: Product Compatibility, Exclusive Purchase Commitment, and Competition Effects

• 成果类型: Article
• 署名作者: Li, Xinxin; Chen, Yuxin
• 署名单位: University of Connecticut; Northwestern University
• 刊物名称: INFORMATION SYSTEMS RESEARCH
• ISSN/ISSBN: 1047-7047
• DOI: 10.1287/isre.1110.0412
• 发表日期: 2012
• 页码: 1158-1174
• 关键词: network externalities; countervailing-power; switching costs; price; software; MARKETS; TECHNOLOGY; alliances; QUALITY; systems

摘要

When companies purchase information technology (IT) products for their employees, departments, or divisions, whether to standardize on one product or to allow the users to make their own choices is an important decision for IT managers to make. By consolidating demand and committing to buy from a single seller, standardization ensures product compatibility within the corporation and has a potential to induce intense price competition among sellers, but this potential is subject to whether competing products are compatible and the relative competitive advantages of the sellers. This paper studies when it is optimal for an employer to commit to exclusive purchase from a single seller to enforce standardization and sellers' incentives to invest in mutual compatibility. Our results suggest that the employer is more likely to make such a commitment when the competing products are compatible, less vertically differentiated, and/or more horizontally differentiated. We also find that the sellers agree to cooperate and invest in mutual compatibility only when the gap between their competitive advantages is moderate, but the availability of third party converters that enable partial compatibility can induce more collaboration among the sellers.