Knowledge that Transforms

Should a firm selling consumer electronics devices, such as smartphones, bundle these devices with bloatware? If consumers can remove bloatware by jailbreaking these devices, how should the firm adjust its prices and even its decision of bloatware inclusion? This research provides managerial insights for firms considering bloatware and policymakers regulating such practices. We show that it is not always optimal for a firm to sell a bloatware-included product. Furthermore, our analysis reveals that even if the firm can make it harder for consumers to jailbreak, the firm is not always better off by doing so. Consumers do not necessarily benefit from the reduced cost of jailbreaking either. Because the firm passes part of the bloatware revenue to consumers in the form of a lower price, whenever bloatware inclusion benefits the firm, consumers actually also benefit.

Our paper shows that firm-initiated social media can contribute significantly to the value of firms. The findings provide a rationale for firms to invest heavily in their social media while countering those who question the value of social media. Using a sample of 63 South Korean firms across industries over a three-year period, we find that a firm’s social media actions yield significant financial returns, and the magnitude of these financial returns depends on the types of communication actions: that is, a firm’s (broadcasted) posts versus its responses to customer messages. Our conceptual framework and empirical methodology can help firms more accurately gauge the ROI of their social media investments and tailor their efforts accordingly. Specifically, our results suggest that promptly responding to customer complaints is a key to increasing customer satisfaction and firm performance. Taken together, our study provides guidance for firms on how to optimize their social media strategies to extract greater value from social media.