Advanced Competitive Strategy | Online Course Support

What could a smartphone manufacturer do to increase the switching costs of his customers?

 
 
 

This is true. Improving your customer services e.g. via offering free repair of the smartphones increases switching costs because repair costs have to be paid by the customers themselves when switching.

 
 
 
 

This is true. Offering free apps which can only be used by your smartphones really increases the switching costs of your customers.

 
 
 

This is correct. The statement describes a loyalty program which locks-in consumers.

 
 

This is also true. If your customers have signed a contract which lasts over a longer period then switching suppliers is associated with a termination penalty. Such a penalty locks-in your consumers.

 
 

This is true. Offering proprietary complementary goods which increase the consumers’ utility from your main product implicitly locks-in your consumers because they also have to buy new complementary goods when switching suppliers.

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