Standardization helps products work with one another.
Standardization is the adoption of methods and procedures for product operation across different companies. Proactive standardization is when companies takes part in creating operating standards with other companies at the early stage of product creation.
Standardization Advantages
Standards help end product users. Buying products built to commonly accepted standards improves compatibility and allows users to use their devices in different settings. Common connectors or processing languages are examples of standardization allowing devices to interact.
Proactive Standardization
Companies that engage in proactive standardization begin communicating and cooperating with companies that produce similar products to agree on the standards they will all use. This has the advantage of reducing product modification costs if the companies choose to adopt standards at a later date.
Economies of Scale
Since the advantages of product standardization depend on customers using both products and competing, but related, technologies, the advantages of standardization are dependent upon the existence of economies of scale. These economies of scale can only result from widespread consumer adoption of a product set.
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