Final answer:
The correct option for a firm looking to exploit network effects is to create incentives for other firms to develop complementary products. This strategy can enhance the value of the firm's product and encourage wider adoption and investment in the ecosystem.
The correct answer is option c. create incentives for other firms to develop complementary products.
Step-by-step explanation:
To a firm that wants to exploit network effects, I would advise creating incentives for other firms to develop complementary products. By doing this, the firm can enhance the value of its own product as the ecosystem around it grows, encouraging more users and businesses to adopt and invest in the platform.
In contrast, charging a heavy license fee for new technology, option a, would likely deter adoption and inhibit the network effect. Not using aggressive marketing strategies, option b, could lead to low product visibility. Refraining from using technical standards, option d, could lead to compatibility issues that deter users. Lastly, increasing switching costs, option e, might keep current customers but could discourage new users from joining the network.
Option c, create incentives for other firms to develop complementary products, aligns with the principle that a larger network increases the value of a product or service. Other companies creating products that complement yours can lead to a richer user experience, which can enhance the attractiveness of your firm's offering, spurring further adoption and enhancing network effects.