Standardization For A Format War

977 WordsOct 31, 20164 Pages
1.Describe standardization, format wars, and how standardization can lead to a format war. Standardization: Set of predefined specifications, rules or features that manufactures or producers need to follow when they make/produce the products/goods or components of it. Example- MacDonalds set standardization for each of its menu items like size, weight, food value etc. So, each food item need to prepare according to predefined standard. Format wars: It is a kind of battle or war among the companies to set and control the standard in a market. In other words a company set standard for its products, similerly another company of same industry also set standard, now they compete in the market for customers and long term better control the market. Example- Microsoft and Intel had won format war against Apple computer 's proprietary system and later against IBM OS/2 opereting system. How standardization can lead to a format war: Standardization can be an improtant source of competitive advantages. Most of the cases one standard become the winning standard, so many wars in industries occure around the companies for get the winning standard. Thus standardization lead to format war. 2.Once standardization occurs, how does the industry benefit? Standardization offers several benefits- Firstly standardization ensure compatibility between products and their complements (other products used with them). Example- PCs with software. The economic benefits here is reducing the products
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