Why are standards so important in many high-tech industries? What are the competitive implications of this?
Compatibility is the biggest reason standards are important in many high-tech industries. The competitive implications are that if a company has ownership of one of these standards then it can be a source of competitive advantage for them. Companies fight over standards, to determine which company will emerge the market leader and dictate the direction of other businesses. Examples of this are Microsoft and Apple, who have been involved in an ongoing format war for years. This is a rare of example of two industry leaders supporting different standards, yet each growing large enough to support a standard. Our textbook uses the example of the smartphone operating system to illustrate this point as well.
This solution outlines the importance of standards in high tech industries and gives the competitive implications. It includes examples and a reference.