Strategic Decision for a Camera Manufacturer
A company that produces high-end digital cameras is considering two strategies for its new line of lenses and camera bodies.
Strategy 1: Develop a new, proprietary lens mount. This design would be incompatible with any other camera system on the market, meaning their new lenses would only work with their new cameras, and their new cameras would only work with their new lenses.
Strategy 2: Adopt an existing, popular lens mount standard. This would allow customers to use the company's new lenses on camera bodies from other manufacturers, and to use lenses from other manufacturers on the company's new camera bodies.
As an economic consultant, which strategy would you recommend if the company's primary goal is to make its customers less sensitive to the price of its camera bodies in the future? Justify your recommendation by explaining the underlying economic principle.
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Ch.7 The firm and its customers - The Economy 2.0 Microeconomics @ CORE Econ
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