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Topic: Switching costs

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Porter 5 forces analysis

Strategic management

Business model

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Strategy dynamics

	Research - Lowering Switching Costs Make the Market More Competitive: Stanford GSB (Site not responding. Last check: 2007-11-06)
		This move is sure to be greeted with enthusiasm by consumers who, when faced with switching cellular phone carriers, have had to contend with notifying everyone in their phone book, or changing their stationery, or putting a forwarding message on their old number that will expire within a scant few months.
		Switching costs are aggressively exploited by companies in areas such as computers, banking, telephony, and more.
		Again, if switching costs ever led to lower prices, it would be in a high-growth market where there were lots of new customers.
	www.gsb.stanford.edu /news/research/stratman_switchingcosts.shtml (815 words)

	[No title] (Site not responding. Last check: 2007-11-06)
		With the exception that the switching costs and the loop module do not fully integrate to enable changes in assumptions, inputs and/or outputs in either cost model to feed into the other, the model does allow for tracing of input changes to output results and for alteration of assumptions.
		Much of a model’s use is beyond its methodology for calculating costs, but lies within the logic of its inputs, the source of the inputs, and the assumptions applied both to development of specific inputs or to their use in cost development within the model.
		Switch costing depends on a number of variables, one of which is network configurations: loops served, types of services provided, loop lengths, copper or fiber content on both distribution and feeder ends and associated ratios.
	www.ora.ca.gov /telcodocs/telco_formal_2_GTECICM.doc (4759 words)

	NERA Economic Consulting \| Event
		The report consolidates fifteen years of academic research on switching costs, and presents these in an accessible way to the policy, legal, and academic communities, whilst providing some "signposts" to policy makers on the policy implications of switching costs.
		The report shows how in markets with switching costs, firms tend to adopt "bargain then rip-off pricing," in which prices are driven down for those not already locked in by switching costs, compensating -- in part or in full -- for the higher prices faced once customers are locked in.
		Padilla and Williams also showed "switching costs in practice," giving examples from real-world competition cases such as the 1995 Monopolies and Mergers Commission report on video games and the 2001 Competition Commission report on the proposed Abbey National/Lloyds TSB merger, to demonstrate how switching costs can make a difference in practice.
	www.nera.com /event.asp?e_ID=1922 (370 words)

	[No title]
		Cost studies are “forward-looking” in the sense that they calculate the cost to provide unbundled network elements using the latest plant technology for local loop facilities, switching, and other elements of the network.
		Since the object of the unbundled loop cost study is to determine the forward-looking cost to serve the total demand for loops and the distribution module only deals with distribution plant, average loop lengths of distribution plant must be estimated for all loops in each geographic area.
		The carrier connection costs are for the activities required to make the physical connections from the serving wire center to the CLEC or end user, including the coordination and testing necessary to ensure that all transmission parameters have been achieved consistent with specifications set forth in the tariff and associated technical references.
	www.sbc.com /Large-Files/IIOW-LD/Appendix_A/Currie/Currie_OH_Affidavit_Attachment_A.doc (11926 words)

	Switching costs Definition. Define Switching costs. What is Switching costs? (Site not responding. Last check: 2007-11-06)
		Switching Costs refer to the notion of the hidden costs a consumer is faced when switching from one product to another in the marketplace.
		Consumers should really try to factor in the switching costs when making purchasing decisions, since these impact purchasing decisions they may be faced with in the future (limiting freedom of choice).
		Switching costs are developed by companies in order to try to establish lock-in.
	www.definethat.com /define/340.htm (125 words)

	Airline choice, switching costs and frequent flyer programs
		Switching costs are costs that customers face when switching from one firm to another.
		In this paper we estimate the switching costs for domestic airline routes in Sweden between 1992 and 2002.
		The paper ends with a brief discussion on the welfare consequences of switching cots, where the connection between habit formation and switching costs is discussed.
	www.handels.gu.se /epc/archive/00003341 (156 words)

	Federal Reserve Bank of Philadelphia - Payment Cards Center - Conferences - A Summary of the Conference on Consumer ... (Site not responding. Last check: 2007-11-06)
		In their paper, the authors develop an empirical model that is able to quantify the importance of switching costs as well as customers' probabilities of switching from one firm to another, even when customer-specific data are absent.
		The study's empirical results confirm the importance of switching costs in bank lending, with the estimated magnitude of switching costs differing across various subsamples of the banks.
		But switching costs are found to decrease with bank size, down to 2.1 percent for banks with 60 or more branches.
	www.phil.frb.org /pcc/conferences/summary1.html (3174 words)

	Information Costs, Lifecycle Costs, Switching Costs, and Lock-In*
		The Court supported this by faking note of the fact that the initial cost of Kodak equipment is high; and that because the equipment is unique, switching costs are particularly high.
		"Switching costs" are perhaps the single most important factor in determining whether a customer is "locked-in," or may migrate to another computer system to avoid the increase cost.
		To become a doctor, a lawyer would have to give up his or her practice (and income), perhaps defer or service existing student loans; apply to medical school; complete a residency; and at the end of seven or eight years would be a doctor.
	library.lp.findlaw.com /articles/file/00324/002129/title/Subject/topic/Antitrust%20and%20Trade%20Regulation_Vertical%20Restraints/filename/antitrustandtraderegulation_2_247 (2628 words)

	Economics of Information Technology (Site not responding. Last check: 2007-11-06)
		[2003] examine switching costs in the credit card and bank loan markets and find that they are substantial: in the bank loan case, they appear to amount to about a third of the average interest rate on loans.
		Under conditions of high fixed cost and low marginal cost, it is well known that a competitive equilibrium may not exist, so the first theorem is irrelevant, and the required convexity conditions may not hold, making the second welfare theorem also irrelevant.
		In this case, the switching costs are due to the cost of coordination among millions of individuals, a cost that may be extremely large.
	www.sims.berkeley.edu /~hal/Papers/mattioli/mattioli.html (14875 words)

	Partnering: Practical Problems and Conceptual Limits to Relationship Marketing, International Journal for Construction ... (Site not responding. Last check: 2007-11-06)
		Switching costs are a theoretical component of transaction analysis and thus the traditional marketing mix approach.
		Should the client decide to switch contractor, the benefits derived from the agreement cease and in the case of breaking a formal agreement there may be additional legal costs incurred.
		Specifically, the cost of switching from one contractor to another are marginal between traditional contracting and strategic or project partnering where a command strategy is adopted on the client side.
	www.brookes.ac.uk /other/conmark/IJCM/issue_02/010202.html (4849 words)

	[No title]
		Loop costs are expressed as a recurring monthly cost which includes capital costs (depreciation, the cost of capital and income taxes) and operating expenses for ongoing plant maintenance and ad valorem taxes.
		4.0 Switching Costs 4.1 Study Purpose A purpose of the switching cost study is to determine the costs for the unbundled line-side and trunk-side end office and tandem ports.
		The resultant tandem switching cost is combined with the measurement, SS7 signaling, and bill inquiry portion of the billing expense costs to produce the overall average cost per minute for this UNE.
	www.sbc.com /Large-Files/IIOW-LD/Appendix_A/Makarewicz/Makarewicz_IN_Affidavit_Attachment_A.doc (10093 words)

	switching costs definition
		Switching Costs are the costs incurred in changing from one provider of a product or service to another.
		Switching costs may be tangible or intangible costs incurred due to the change of this source.
		Contact us for a business plan quote to learn more about how we define switching costs and how we can help you complete your business plan today.
	www.hjventures.com /glossary-switching-costs.html (127 words)

	NERA Economic Consulting \| Publication
		"Switching costs" can be defined as the real or perceived costs that are incurred when changing suppliers but which are not incurred by remaining with the current supplier.
		Such costs arise in a variety of everyday situations ranging from early redemption penalties when changing mortgage lenders to the uncertainty costs faced with trying an untested brand that may or may not be suitable.
		This annex presents an assessment of the empirical methods the OFT could use to analyze markets in which switching costs are present.
	www.nera.com /Publication.asp?p_ID=1205 (293 words)

	switching costs and Stock Trading at TradeStars + Stock Trading (Site not responding. Last check: 2007-11-06)
		switching costs and stock trading - get fab switching costs by a superb website with ultra-safe traders methods.
		It is possible to trade any of the instruments that comprise a market, or even an index of the whole market, a single markets always rising over time, the answer is a guarded yes.
		The general rise in markets seems to be a reflection of the increase switching falling in value for switching costs the seconds to minutes they own the stock, allowing them to lock in quick profits.
	www.tradestars.com /content/switching-costs.asp (106 words)

	A numerical algorithm for optimal control problems with switching costs (Site not responding. Last check: 2007-11-06)
		Optimal control problems with switching costs arise in a number of applications, and are particularly important when standard control theory gives "chattering controls".
		A numerical method is given for finding optimal controls for linear problems (linear dynamics, linear plus switching cost).
		This is used to develop an algorithm for finding sub-optimal control functions for nonlinear problems with switching costs.
	anziamj.austms.org.au /V34/part2/Stewart.html (110 words)

	Moats, Barriers and Switching Costs
		High switching costs are created mostly by what is known in the Microcosm as "architectures," the Wintel architecture, the Mac architecture, the UNIX architecture.
		There are other ways of creating high switching costs.
		Since you add work, which is the same as cost, you tend to stick there.
	www.softwaretimes.com /files/moats,%20barriers%20and%20switch.html (859 words)

	Adaptive Sampling with Switching Costs or Constraints (Site not responding. Last check: 2007-11-06)
		It is observed that the expected number of switches grows approximately as the square root of the sample size, for sample sizes up to a few hundred, when on optimal sequential allocation is performed with no regard for switching.
		It is also observed that one can dramatically reduce the number of switches without substantially affecting the expected value of the objective function, as long as the switches are made optimally.
		The algorithms developed herein are used in New Adaptive Designs that Incorporate Switching Concerns in the design and analysis of optimal and hyperopic procedures.
	www.eecs.umich.edu /~qstout/abs/IF96.html (246 words)

	Duke Economics Working Paper (Site not responding. Last check: 2007-11-06)
		Archive users may download papers and produce them for their own personal use, but downloading of papers for any other activity, including reposting to other electronic bulletin boards or archives, may not be done without the written consent of the authors.
		This paper examines the use of switching costs by long lived strategic buyers to manage dynamic competition between rival suppliers.
		We show, ironically, when switching costs are high a buyer may induce suppliers to price more competitively by credibly threatening to replace the incumbent supplier with his rivals.
	www.econ.duke.edu /Papers/Abstracts03/abstract.03.04.html (169 words)

	Frank P. Maier-Rigaud: Switching Costs in Retroactive Rebates – What’s time got to do with it? (Site not responding. Last check: 2007-11-06)
		Switching Costs in Retroactive Rebates – What’s time got to do with it?
		This paper analyzes the role of the reference period in assessing switching costs in retroactive rebates.
		A retroactive rebate allows a firm to use the inelastic portion of demand as leverage to decrease price in the elastic portion of demand, thereby artificially increasing switching costs of buyers.
	www.mpp-rdg.mpg.de /abst2005_3.html (164 words)

	Porter 5 Forces Analysis (Site not responding. Last check: 2007-11-06)
		Four forces -- the bargaining power of customers, the bargaining power of suppliers, the threat of new entrants, and the threat of substitute products -- combine with other variables to influence a fifth force, the level of competition in an industry.
		supplier switching costs relative to firm switching costs
		The other elements are strategic groups (also called strategic sets), the value chain, the generic strategies of cost leadership, differentiation, and focus, and the market positioning strategies of value based, needs based, and access based market positions.
	www.wikiverse.org /porter-5-forces-analysis (256 words)

	Vita
		It investigates the nature of switching costs, their primary antecedents, and the role they play in retaining continuous service customers.
		These switching costs may be managed by managing consumers’ perceptions of the complexity of the services and the heterogeneity among service providers, by managing consumers’ utilization of the various features offered by service providers, and by selecting customers based upon their level of experience with other service providers and their experience with the switching process.
		Consumers’ procedural and relational switching costs, in turn, may increase their intentions to stay with an incumbent provider, even when competing providers offer financial switching incentives.
	lsb.scu.edu /~tburnham/vita.htm (803 words)

	Switching costs at online dictionary financial terminology and banking terms. Switching costs services. Online free ... (Site not responding. Last check: 2007-11-06)
		Switching costs at online dictionary financial terminology and banking terms.
		The costs incurred when a customer changes from one supplier or marketplace to another.
		The higher these costs are, the more difficult it is to execute the switch.
	money.profigroup.com /terms/switching_costs.html (100 words)

	[No title]
		The switching cost included costs of removal and new installation, as well as the price difference between the used switches and new ones from a different source
		The costs of switching are small in absolute terms, but large relative to the costs of the individual consumer
		Switching costs are costs of converting data to a new format
	zzyx.ucsc.edu /~boxjenk/ec139-99/e139-n17.html (692 words)

	Untitled Document
		The game is to lure you in with attractive introductory offers and then zap you with higher rates, new fees, and fewer perks once you are so "locked in" that switching to a new firm would be a real pain in the neck--or the wallet.
		By studying several hundred AT&T telephone contracts for big 800-number users, Viard found that after portability, the cost of 800 numbers fell.
		And AScribe does it at a cost all organizations, large and small, can afford, a fraction of what corporate newswires charge.
	www.ascribe.org /cgi-bin/spew4th.pl?ascribeid=20031113.140611&time=14%2037%20PST&year=2003&public=1 (825 words)

	COLLECTIVE SWITCHING COSTS
		In many information industries, collective switching costs are the biggest single force working in favor of incumbents.
		Worse yet for would-be entrants and innovators, switching costs work in a nonlinear way: convincing ten people connected in a network to switch to your incompatible network is more than ten times as hard as getting one customer to switch.
		Coordination costs were indeed significant in the age of the typewriter.
	papartis.infoseka.lt /Virtuv/elpaliet/qwerty.htm (797 words)

	Lock 'Em Up! - BOOK EXCERPT: INFORMATION RULES - CIO Magazine October 15, 1998 (Site not responding. Last check: 2007-11-06)
		This is all the more so with a CD that costs less than a dollar to produce, in comparison with printed material that could cost $5 or more to produce.
		Certainly, the customer's switching costs are higher than they were the first time around.
		This is especially true if switching costs are rising over time (as with information storage and brand-specific training) rather than falling over time (as with durable equipment that depreciates and will be replaced by new and superior models).
	www.cio.com /archive/101598/book.html (1943 words)

	Citations: Competition when Consumers have Switching Costs: An Overview with Applications to Industrial Organization, ... (Site not responding. Last check: 2007-11-06)
		....Marketing and Switching Costs If sellers are able to establish prohibitive high switching costs, buyers will behave loyally because migrating to competitors will be too expensive for them.
		There are four types of switching costs [8] Direct switching costs: Direct switching costs are the costs resulting from product search when purchasing from an alternate, previously unknown partner.
		Artificial and contractual switching costs: Artificial and contractual switching costs are immediate monetary costs of migrating to a competitor.
	citeseer.ist.psu.edu /context/1654310/0 (471 words)

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