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The network effect (also called winner takes it all) is one of four basic strategies. The net effect is a phenomenon that occurs when the value of the offer increases for each additional buyer or user. Examples of companies include Ebay and Blocket, both of which are dominant players in their niches, and Facebook, which nowadays is clearly the dominant social network. The companies that succeed in achieving network effect and getting more users than competitors often have a position which is difficult to affect. Compare Cost leadership, Differentiation and Customer relationship.
