The power of two-sided platforms to disseminate resistant innovations

Abstract

<jats:sec><jats:title content-type="abstract-subheading">Purpose</jats:title><jats:p>Platforms have often been considered an excellent example of innovation with an incredibly fast diffusion rate due to network effects. Notwithstanding, in many cases, they match the definition of resistant innovations, requiring a significant change in the consumers' behavior that may slow down the process of diffusion. How can network effects be leveraged to disseminate resistant innovation based on a platform structure?</jats:p></jats:sec><jats:sec><jats:title content-type="abstract-subheading">Design/methodology/approach</jats:title><jats:p>This research focuses on the car-sharing industry as a single case study, involving five different providers and two service aggregators operating in Milan, Italy.</jats:p></jats:sec><jats:sec><jats:title content-type="abstract-subheading">Findings</jats:title><jats:p>First, this research shows how direct network externalities on the providers' side may play a vital role in the dissemination process, increasing the value perceived by the potential new entrants. Second, it shows how co-opetition dynamics, eventually encouraging multihoming phenomenon, may play – in the first phases of the diffusion process – a pivotal role to let the industry flourish.</jats:p></jats:sec><jats:sec><jats:title content-type="abstract-subheading">Research limitations/implications</jats:title><jats:p>This research contributes to the growing literature on platforms and two-sided platform showing how this model may be applied more broadly to network businesses to understand competitive dynamics.</jats:p></jats:sec><jats:sec><jats:title content-type="abstract-subheading">Practical implications</jats:title><jats:p>This study offers insights to managers and practitioners dealing with network services, showing the potential benefits of coopetitive strategies while facing the initial phases of the dissemination process.</jats:p></jats:sec><jats:sec><jats:title content-type="abstract-subheading">Originality/value</jats:title><jats:p>This paper gets together resistant innovation, two-sided platforms and network effects offering novel insights on the dynamics of network services – such as the car-sharing – while giving fresh insights taking the perspective of the service providers.</jats:p></jats:sec>

Appraising the Transformation and Future of Digital Multisided Platforms–A Bibliometric Analysis and Systematic Literature Review

“…Network effects alone cannot guarantee profit maximization [76] as many of the failed platforms were able to garner a good number of suppliers and buyers creating strong network effects yet they failed so the next step is governance and that leads to safety and trust issues. Network externalities play an important role in adding value to product or service platforms, by bringing in more participants on either side of the platform but in this case, multihoming cannot be neglected since many users take advantage of multiple platforms offering the same services [77]. Some digital platforms have to create a balance of revenue from subscribers and advertisers therefore pricing strategy is of key importance, or in some cases, one side of the platform bears the prices while the other avail free services, so the revenue model is imbalanced.…”

Digital platforms in fashion rental: a business model analysis

“…With the advent of information technology, collaborative fashion consumption forms have evolved from physical and local marketplaces to global online communities with larger economic, Digital platforms in fashion rental environmental and social effects (Botsam and Rogers, 2010). In fact, digital platforms connect people, organizations and resources and facilitate interaction between businesses and consumers (Constantinides et al, 2018) that are useful in creating and capturing value (Parker et al, 2016), by having a disruptive impact in several markets (Trabucchi and Buganza, 2020).…”

“…Rent the Runway). In the fashion retail industry, examples of entrepreneurial initiatives that adapt the concept of sharing and collaborative consumption to the fashion context, by providing clothing and luxury reselling, renting or swapping, have raised rapidly before the emergence of coronavirus disease 2019 (COVID-19) (Adam et al , 2018; ThredUp, 2020), due to the diffusion of digital platforms (Trabucchi and Buganza, 2020).…”