The housing boom created an exuberant environment in which many residential remodel businesses dismissed standard business models, focusing on increasing market share at the expense of the bottom line.??A canonical franchisee's specialty remodel business model? (as those at??Luxury Bath or Bath Fitter) ?relied on harnessing network effects at a sustained net loss to build market share/brand awareness.? The franchisee expected that they could build enough brand awareness to charge profitable rates for their services later. The motto of the franchisor "get big fast or get out" reflected this strategy. During the loss period the franchisee's relied on tapping the build up of equity of their homes due to the housing bubble, personal saving or inheritances to pay their expenses
Network effects become significant after a certain sales level has been achieved, called critical mass, a term to describe the existence of sufficient momentum that the momentum becomes self-sustaining and fuels further jones blue alternate jersey growth.?? As the value of the goods is determined by the user base, this implies that after a certain number
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