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

Abstract

The world's most valuable public companies today are built on digital platforms. While American digital platforms (ADPs) have successfully dominated many international markets, some Chinese digital platforms (CDPs) have managed to survive and thrive in China, with European digital platforms (EDPs) largely absent both at home and abroad. Using comprehensive longitudinal data over 6 years, this study examines the platform competition between ADPs and CDPs in China, and explores how digital platforms challenge traditional ways of thinking about strategy and international competition. Some ADPs initially dominated the Chinese market, but some CDPs used their institutional advantages in China to offset the competitive advantages of ADPs based on superior resources and capabilities and strong market positions. Their competition evolved over three distinctive episodes so far, and CDPs used successive temporary advantages to achieve sustainable competitive advantages dynamically and accomplished radical changes cumulatively through incremental changes. A new dynamic equilibrium model of platform competition -'the spiral model' -between global and native digital platforms is developed, which highlights a trajectory that is different from the dominant models of change in the literature. Limitations of the study and new areas for future research are highlighted. I would like to thank the large number of senior business leaders who participated in this research for their time and insights. The advice from Professor Hugh Willmott, Professor Davide Ravasi and Professor Andre Spicer was invaluable during the revision. Associate Editor Professor Stephen Brammer provided excellent guidance in addressing reviewer concerns and articulating contributions. The constructive criticisms and suggestions by the anonymous reviewers played an important part in shaping the focus of the paper. An earlier version of this paper was awarded the Best Full Paper Prize (eBusiness & eGovernment) at the BAM 2020 Conference.

Digital Platform Complementors and the Number of Product Features: Evidence from the Apple iOS App Store

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Digitalization as a Factor of Production in China and the Impact on Total Factor Productivity (TFP)

“…This index, meticulously designed with China's unique socio-economic fabric in mind, offers insights that are both profound and pertinent to the nation's rapidly evolving digital milieu. While the DESI and NRI capture global trends and technological readiness, Peking University's index is astutely sensitive to China's distinct digital trajectory [42]. Notably, its strength lies in its precision and depth, addressing the unique contours of China's digital landscape.…”

“…Therefore, the digital factor is represented by the digitalization index, which is constructed based on the breadth of coverage, depth of usage, and digital support services of digitalization [43][44][45]. The specific indicators of the digitalization index are shown in Table 1: For the above-mentioned comprehensive system containing 33 indexes, we refer to Li (2022) [42], and adopt the efficacy function to realize dimensionless. Further, for the weights, we refer to the weights given by the Digitalization Research Center of Peking University, Li (2022), and Li et al (2020) [42,43].…”

“…The specific indicators of the digitalization index are shown in Table 1: For the above-mentioned comprehensive system containing 33 indexes, we refer to Li (2022) [42], and adopt the efficacy function to realize dimensionless. Further, for the weights, we refer to the weights given by the Digitalization Research Center of Peking University, Li (2022), and Li et al (2020) [42,43]. Their weight selection combines subjective evaluation (expert scoring) and objective evaluation (data mining), which has been recognized by other studies.…”

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