Platform Development: Emerging Insights From a Nascent Industry

Abstract

This article investigates the emergence and development of the innovation platform in a nascent industry, through a dynamic capabilities perspective. Based on an inductive study of the U.K.’s tele-rehabilitation through gaming (TRTG) industry, we identify four capabilities that are important for successful platform development: innovation leverage, market exploration, quality control, and appropriation. A holistic framework is developed to explain how these capabilities can facilitate platform development by enabling appropriate business models and activities. We then discuss how a firm could define and redefine its firm boundary in order to deploy the four capabilities for platform development.

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

“…This is in line with property rights theory in that payoff rights determine the economic agent's ex ante investment incentive, yet it remains unique because payoff rights are not transferred with asset ownership but through the platform owner's imposition of technical designs. Specific revenue-sharing schemes and intellectual property protection features are designed such that complementors can recoup investment and appropriate value from their provision of offerings on the platform (Nambisan & Sawhney, 2011;Shi, Li, & Chumnumpan, 2020;Simcoe, Graham, & Feldman, 2009). For platforms that rely on nonpecuniary, voluntary activities, and interactions, such as knowledge sharing and information content creation, platform owners may nonetheless implement paid features that offer financial incentives to stimulate user participation and high-quality contributions (Kuang, Huang, Hong, & Yan, 2019;Sun & Zhu, 2013).…”

Sustainable Competitive Advantages via Temporary Advantages: Insights from the Competition between American and Chinese Digital Platforms in China

“…Longitudinal case studies on the way that platforms evolve over time in new markets are particularly needed (e.g. Khanagha et al ., 2020; Logue and Grimes, 2019; Shi, Li and Chumnumpan, 2021).…”

“…Achieving a large installed base early could lead to a dominant position, so firms often use penetration pricing to rapidly build up an installed base in the hope of recouping early losses later through secondary revenue streams (Rietveld and Schilling, 2020). This also significantly influences a firm's intellectual property strategy, for example, either liberally licensing technology or temporarily forgoing patent enforcement in order to speed up the accumulation of installed base and complementary goods (Karhu, Gustafsson and Lyytinen, 2018;Parker and Van Alstyne, 2018;Shi, Li and Chumnumpan, 2021). As will be shown later, the cost benefit of copying and imitation for platforms also differs from traditional organizations.…”

“…First, although it is widely recognized that competitive dynamics play a key role in platform competition, most studies so far have focused on single design parameters, for example, how platforms use price, subsidization or provision of complements to create strong network externalities (Rietveld and Schilling, 2020). Since digital platforms operate 'in a setting that calls for highly interdependent decisions' (Helfat andRaubitschek, 2018, p. 1391), the success of a platform requires holistic thinking (Shi, Li and Chumnumpan, 2021). This calls for more empirical research to systematically explore interdependent decisions in the competitive battle for market leadership (Kretschmer et al, 2020).…”

Platform Governance Design in Platform Ecosystems: Implications for Complementors’ Multihoming Decision

“…Platform research to date emphasizes how platform governance can prompt positive externalities (or indirect network effects) between producers and consumers (Boudreau, 2012; Cennamo & Santaló, 2013; Zhu & Iansiti, 2012). Yet increasingly, digital technologies have enabled firms to organize as platforms around which various types of producers coalesce into ecosystems (Jacobides, Cennamo, & Gawer, 2018; Shi, Li, & Chumnumpan, 2020). The multilateral interdependent relationships among different groups of producers could be a source of frictions in collaborative production (Adner, 2017) to which platform research has paid limited attention (with exceptions, such as Hagiu, 2014; Simcoe & Watson, 2019).…”