Cited by 780Digital Platforms and EconomicsBusiness Strategy and InnovationMerger and Competition Analysis

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Platform competition: Strategic trade‐offs in platform markets

Cennamo, Carmelo, Santalo, Juan·2013·Strategic Management Journal

DOI 10.1002/smj.2066

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Abstract

Because the literature on platform competition emphasizes the role of network effects, it prescribes rapidly expanding a network of platform users and complementary applications to capture entire markets. We challenge the unconditional logic of a winner‐take‐all ( WTA ) approach by empirically analyzing the dominant strategies used to build and position platform systems in the U.S. video game industry. We show that when platform firms pursue two popular WTA strategies concurrently and with equal intensity (growing the number and variety of applications while also securing a larger fraction of those applications with exclusivity agreements), it diminishes the benefits of each strategy to the point that it lowers platform performance. We also show that a differentiation strategy based on distinctive positioning improves a platform's performance only when a platform system is highly distinctive relative to its rivals. Our results suggest that platform competition is shaped by important strategic trade‐offs and that the WTA approach will not be universally successful . Copyright © 2013 John Wiley & Sons, Ltd.

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Authors: Cennamo, C., & Santalo, J.
Affiliations: Bocconi University (IT)
Department of Strategy IE Business School Madrid Spain
Corresponding author: Cennamo, Carmelo
ORCID: Cennamo, Carmelo
Venue: Strategic Management Journal
Publisher: Wiley
Published: 2013-02-08
Volume: 34
Issue: 11
Pages: 1331-1350
ISSN: 0143-2095 (ISSN-L)
1097-0266
DOI: 10.1002/smj.2066
OpenAlex: W2120221151
Cited by: 780
References: 81
Citations by year: 2026: 80 · 2025: 92 · 2024: 85 · 2023: 95 · 2022: 90 · 2021: 89 · 2020: 82 · 2019: 57 · 2018: 38 · 2017: 31 · 2016: 15 · 2015: 17 · 2014: 7 · 2013: 2
FWCI: 40.27
Type: journal article
Language: en
Open access: closed
Licence: onlinelibrary.wiley.com/termsAndConditions#vor (vor)
Locations: Strategic Management Journal (publishedVersion)
Archivio istituzionale della Ricerca - Bocconi (submittedVersion)
Funders: Ministerio de Ciencia e Innovación
Topics: Social Sciences › Business, Management and Accounting › Strategy and Management › Digital Platforms and Economics
Social Sciences › Business, Management and Accounting › Strategy and Management › Business Strategy and Innovation
Social Sciences › Economics, Econometrics and Finance › Economics and Econometrics › Merger and Competition Analysis
Keywords: platform competition, strategic trade-offs, network effects, exclusivity agreements, platform differentiation, video game industry, platform performance, market capture

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Platform competition: Strategic trade‐offs in platform markets

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