Industry architecture as a determinant of successful platform strategies: a case study of the i‐mode mobile Internet service

Abstract

What factors and processes drive value appropriation and value creation in interdependent industry ecosystems? This paper explores this issue through a case study comparing the deployment of the i‐mode mobile Internet service in two countries, seeking the reasons behind its contrasting fortunes: spectacular success in Japan vs failure in Europe. The comparison between network operators NTT Docomo in Japan and KPN in the Netherlands suggests that differences in the underlying industry architectures explain why similar platform strategies led to such different outcomes. The paper contributes to the literature on industry architecture by unpacking the interaction between evolutionary processes, industry architecture, and business strategies. It also contributes to the platforms literature, by positing that firms' ability to successfully pursue platform strategies depends on industry architecture.

Modeling Simultaneous Cooperation and Competition Among Enterprises

“…These include complementarity (Tee and Gawer 2009), interdependence (Luo 2005), trustworthiness (Bouncken and Fredrich 2012), and reciprocity (Rossi and Warglien 2000). Moreover, it should be noted that cooperation and competition are germane to coopetition because coopetition represents the coaction of these phenomena.…”

“…According to Tee and Gawer (2009),''complementarity refers to the combined returns from the combination of two or more assets, with some combinations resulting in higher value creation than other combinations.'' It is informally referred to as synergy wherein: 'the whole is greater than the sum of its parts'.…”

Structuring the Smartphone Industry: Is the Mobile Internet OS Platform the Key

“…Even Apple and its relatively closed iOS depends upon thousands of application developers to continue to create desirable apps for end-users; those developers that create iPhone apps have bet on the iOS platform's success and must rely on Apple to maintain and update their access to its operating system for ongoing development. In this system the interdependence is not limited to the transactional, supply-chain flow of typical goods and services, but is also based on the strategic exchange and integration of innovation among primary firms and their complementors to advance the platform (Tee and Gawer, 2009). …”

“…Depending upon the robustness of rights, this means that the platform owner may be able to appropriate some of the value created by the applications built by platform users-indeed, the platform owner may depend on such value-creation by complements. The platform owner may also use its power asymmetry to stimulate competition among complementary firms providing the same service, which can lower its costs and further fortify its position (Tee and Gawer, 2009). …”

“…The rules governing who does what, and how firms collaborate, can be "designed" in the sense that they come from regulation, standards, and so on, or "emergent" in that they evolve from social and economic norms (Jacobides, 2006). As Tee and Gawer (2009) showed in their case study of the Japanese cell phone system i-mode, these architectures can be important determinants of how firms are able to establish and promote platforms, as they provide the background structure to the platform ecosystem.…”