Session 3 - Google Car
Definition of Network Effects
Three key terms:
First Mover Advantage
An advantage gained by a company that first introduces a product or service to the market. The first-mover advantage enables a company to establish strong brand recognition and customer loyalty before other entrants to the market.
Note, first mover advantage is a temporary effect, and if you don’t seek to maintain it, it will shrink. Example, look at Zoom and how they’re shrinking.
Winner-Takes-All
A winner-takes-all situation happens when a company dominates a market so thoroughly that competitors have little opportunity to succeed.
For example, YouTube has become a dominant platform for video uploads, while TikTok holds a similar position for short-form videos.
Chicken & Egg Problem
This is a challenge with a two-sided network. You want to get both the customers and the producers onto the platform, but the producers won’t come there until the consumers do and vice versa.
Archive
Platform Expansion and Ecosystem Power
In the first two sessions, we examined how digital technologies shape industries from within. A different challenge arises when powerful platforms expand across industries, bringing with them new forms of data, intelligence, and control.
This session focuses on Google’s early move into autonomous vehicles. While Google Car appears to signal entry into the automotive sector, the case invites a deeper question: What business is Google really trying to be in? As a multi-sided platform offering most services to users for free, Google must find alternative ways to fund growth and prepare for future markets.
Using the Google Car case, we explore how platform logic and network effects enable expansion into new domains—and who ultimately pays for that growth. Please prepare the case below for discussion.
Case: Google Car (614022)Download Google Car (614022)
Now that you have read the case, consider the following case questions and bring your answers to class.
| Case Preparation Questions: 1. What business is Google ultimately trying to build through autonomous vehicles? 2. What capabilities does Google bring to autonomous driving that traditional automakers lack? 3. If Google Car succeeds, how does it reshape Google’s role in the mobility ecosystem? |