Platform Overthrow: uncovering the critical role of functional extension and generic technology

Allier extension fonctionnelle et généricité technique pour renverser une plateforme

Maxime Thomas (), Pascal Le Masson (), Legrand Julien () and Benoit Weil ()
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Maxime Thomas: CGS i3 - Centre de Gestion Scientifique i3 - Mines Paris - PSL (École nationale supérieure des mines de Paris) - PSL - Université Paris Sciences et Lettres - I3 - Institut interdisciplinaire de l’innovation - CNRS - Centre National de la Recherche Scientifique
Pascal Le Masson: CGS i3 - Centre de Gestion Scientifique i3 - Mines Paris - PSL (École nationale supérieure des mines de Paris) - PSL - Université Paris Sciences et Lettres - I3 - Institut interdisciplinaire de l’innovation - CNRS - Centre National de la Recherche Scientifique
Legrand Julien: CGS i3 - Centre de Gestion Scientifique i3 - Mines Paris - PSL (École nationale supérieure des mines de Paris) - PSL - Université Paris Sciences et Lettres - I3 - Institut interdisciplinaire de l’innovation - CNRS - Centre National de la Recherche Scientifique
Benoit Weil: CGS i3 - Centre de Gestion Scientifique i3 - Mines Paris - PSL (École nationale supérieure des mines de Paris) - PSL - Université Paris Sciences et Lettres - I3 - Institut interdisciplinaire de l’innovation - CNRS - Centre National de la Recherche Scientifique

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Abstract: Can a platform leader be challenged and loose its architectural control over its innovation ecosystem? The question seems absurd since theoretical works on modularity and multi-sided markets depict platform competitive landscapes as controlled by a hegemonic platform leader. However, platform history chronicles several cases of leadership shifts for the benefit of firms formerly providing complementary innovations. We coined these situations " platform overthrows ". To bridge the gap between classical optimization models and empirical evidences of platform overthrow, we rely on a design-theory-based model (Legrand et al. 2017) of platform dynamics to generate testable hypothesis. We then test them with a sample of 22 empirical cases of attempts of platform overthrow. Our results indicate that platform overthrows are always built by a challenger that introduces a new functional range in the ecosystem. However, the efforts of the challenger can be ruined if the technology of the platform leader is easily adaptable to the new functional range. Otherwise, the challenger can overthrow its platform leader if it succeeds in designing a technology that can address both the former and the new functions. We conclude by highlighting how studying both technological and functional evolutions can provide a thorough understanding of platform ecosystem dynamics.

Date: 2018-07-02
New Economics Papers: this item is included in nep-com and nep-ino
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Published in R&D Management Conference, Jul 2018, Milan, Italy

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