Classification systems and selection systems: The risks of radical innovation and category spanning

SummaryThis paper looks at the relations between classification and competition, using the theoretical framework of selection system theory. In a particular competitive arena more than one classification system can be in use. The proportion of classification systems in use by consumers that are also in use by the dominant selectors is a determinant of the risks of category spanning and radical innovation. Furthermore, these risks can be better understood by taking into account whether the selection system has different stages occupied by selectors of different types and by looking at the relations between the selectors of the primary market and the selectors of these selectors.

► Selection system theory serves to clarify the relation between classification and competition.
► In one particular competitive arena more than one classification system can be in use. The risks of category spanning and radical innovation are influenced by:
► The proportion of classification systems in use by consumers that are also classification systems in use by the dominant selectors
► Whether the selection systems has different stages occupied by selectors of different types.
► The relations between the selectors of the primary market and the selectors of these selectors.