Slicing the cake without baking it: Opportunistic platform entry strategies in digital markets

Governance and Design of Digital Platforms: A Review and Future Research Directions on a Meta-Organization

“…Nevertheless, scholars also note that complementors may be reluctant to enter such exclusive relationships if not given sufficient incentives (Cennamo & Santaló, 2013). Exclusivity needs to be designed in a way that benefits both the platform owner and complementors in a win-win situation, rather than a situation in which the platform owner can freely enter complementors' spaces (Kim & Luca, 2019;Zhu, 2019), as in the case of Amazon's entry into the market of Toys "R" Us (Hagiu & Yoffie, 2009).Another emerging stream of research reveals that the focal platform can adjust its compatibility with competitors to change the cost of complementor multihoming (Karhu et al, 2018;Karhu & Ritala, 2020). While compatibility provides a conduit for complementors to increase product development efficiency and the consistency of their offerings (Hann, Koh, & Niculescu, 2016;Kretschmer & Claussen, 2016), it also simplifies the process of multihoming since complements can easily port their offerings to other platforms without incurring significant adaptation costs.…”

The future of digital platforms: Conditions of platform overthrow

“…The notion of platform leaders' dilemma (Gawer & Cusumano, 2002) highlights the importance for a platform leader to solve long‐lasting functional issues to prevent competitive threats. Poorly managed platform core transitions (Ozalp, Cennamo, & Gawer, 2018) and poorly controlled technical core boundaries (Karhu & Ritala, 2020) have already been identified as threatening situations for an established platform leader. However, as the literature often conceptualizes platforms as monolithic entities (McIntyre & Srinivasan, 2017), few studies provide a holistic view of the innovation dynamics at stake within a mature platform ecosystem (for an interesting exception, see Gawer, 2020).…”

“…However, there might be a lot of ways for a platform to fall even if the literature has not yet investigated this question (Gawer, 2020). Thus, the bourgeoning work on platform fall (Karhu & Ritala, 2020; Ozalp, Cennamo, & Gawer, 2018) is restricted to one industry and investigates a specific type of platform fall. Therefore, future research could look for a typology of platform falls that is robust throughout different industries.…”

“…However, it is worth noting that this strategy is triggered by an initial mistake of the established platform leader that fails to provide the right balance between learning costs for complementors and technical advances of its platform core. The second piece of research that identifies a specific technical innovation that could be leveraged to overthrow a platform is related to the issue of platform openness (Karhu & Ritala, 2020). It accounts for cases in which the challenger ‘makes an exact copy of all boundary resources upon which complements depend (e.g., APIs) such that, from the complementor's perspective, the platform looks exactly the same as the incumbent's platform’ (Karhu & Ritala, 2020, p. 8).…”

“…The second piece of research that identifies a specific technical innovation that could be leveraged to overthrow a platform is related to the issue of platform openness (Karhu & Ritala, 2020). It accounts for cases in which the challenger ‘makes an exact copy of all boundary resources upon which complements depend (e.g., APIs) such that, from the complementor's perspective, the platform looks exactly the same as the incumbent's platform’ (Karhu & Ritala, 2020, p. 8). In such cases, the marginal cost of complementors to switch is very low, resulting in a deadly threat to the established platform leader.…”