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IESE Research Papers,
IESE Business School

No D/472: Managing customer switching costs: A framework for competing in the networked environment

Mike Hess () and Joan E. Ricart ()
Additional contact information
Mike Hess: IESE Business School, Postal: IESE Business School. Research Division, Av Pearson 21, 08034 Barcelona, SPAIN
Joan E. Ricart: IESE Business School, Postal: IESE Business School. Research Division, Av Pearson 21, 08034 Barcelona, SPAIN

Abstract: Previous research argues that customer switching costs play an important role in the firm 's ability to retain customers and achieve competitive advantage.Research also indicates that in the increasingly networked environment,switching costs are changing in important ways.Despite switching costs 'recognized role in contributing to competitive advantage and their increasingly strategic characteristics in the expanding networked environment,we find a lack of coherence and completeness in the conceptual tools and models developed to understand their role and help effectively manage the phenomenon.In this paper we attempt to address these needs by expanding and refining the conceptualization of switching costs and developing a more comprehensive framework for managers.

Keywords: Strategy; customer switching costs; framework

JEL-codes: M10; M19

32 pages, October 1, 2002

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