Which of the following is an advantage of making a new generation of technology backward compatible?
A) Consumers will have to buy completely new complements.
B) Consumer switching costs may be lower because they anticipate using their existing complements.
C) It allows a firm to reap the benefits of cannibalization.
D) It is typically less expensive to make a new generation of technology backward compatible than to make it incompatible.

Question

Quizplus · Accepted Answer

Making a new generation of technology backward compatible may lower consumer switching costs because they can continue using their existing complements, which may increase the likelihood of them upgrading to the new technology. This can also provide a competitive advantage for the firm as it may attract more customers who are concerned about compatibility issues. However, the other options are incorrect as making a new generation of technology backward compatible may not necessarily lead to consumers having to buy completely new complements, there may not always be benefits from cannibalization, and the cost of making it backward compatible may be higher than making it incompatible.

Which of the Following Is an Advantage of Making a New