How Incumbents Respond Strategically to Emerging Digital Platform-Mediated Settings?

Abstract

Digital platform businesses challenge incumbents by utilizing an ecosystem of actors that provide benefits to customers like cost reduction, convenience, or complementary products and services. Traditional enterprises should transform in order not to lose market share. This transformation potentially induces drastic changes to business models, organizational strategy, business processes, and corporate culture, among others. This chapter aims to understand how incumbent software vendors adapt to digital platform-mediated settings. The research methodology is grounded in an in-depth case study. The work contributes with a description of practical implications exposing implementation challenges, strategic decisions regarding the multiple roles in an ecosystem, criteria to select alliances, the degree of openness, and how to go from idea to action. These findings therefore enrich the literature on digital platform management.