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How On Deal With A Standards Battle?

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Shiwei Wang 1417378 How to deal with a standards battle?
Introduction
In recent years, the rapid development of technology has raised businessmen’s awareness regarding the strategy to deal with standards battles. When a new technology is released onto a market, several competing standards are likely to be released. Under these circumstances, a standards battle may be faced by companies. Clearly, it is of great importance to establish effective strategies to address the problem since companies betting on the wrong standard can result in high losses or even leaving the market (Shapiro and Varian, 1999).

When talking about standards battles, the Blu-ray Disc vs. HD DVD format war was one case which had generated fierce discussion. This essay will first give a brief description of the Blue-ray Disc and HD DVD case. Then, it will introduce the concept of network effects which played an important role in the format war. Finally, some suggestions will be given to deal with standards battles based on the analysis of the case. It is argued that making commitments to a company’s own technology, building an early lead and attracting suppliers of complement could be three effective strategies for a chief executive officer to deal with standards battles.

Blue-ray Disc and HD DVD case
The format war between HD DVD and Blu-ray Disc could be traced back to 1995, when companies began experimenting with the blue laser diode, which had shorter wavelength and enabled more data to be fitted
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