Competing in Digital Markets: A Platform-Based Perspective
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The digitization of the economy is altering the nature of competition, affecting the fundamental way firms compete in digital markets. In this article, we offer a platform-based view of competition in digital markets, present three distinct types of platform markets, the key elements affecting the value of a platform-based service, and the competitive logic that shape competition in these markets. We introduce the concept of platform identity to delineate the platform’s technological and market profile delineating the platform’s competitive identity domain and distinguish it from platform size (which reflects the scale of its user and complementor network). We argue that each platform has a unique identity, and comparisons of rival platforms along these two strategic dimensions—platform size and platform identity—help to explain the nature of competition in digital markets and explain the unique competitive dynamics that depart from mainstream competitive theory’s predictions. Our framework also helps to identify cases where the market boundaries and competitive domains become contested because of platform competition, leading to market convergence. We discuss how the proposed framework can enrich and extend existing theory on competitive dynamics to the context of digital markets, and offer a foundation for future research.
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In platform markets competition is present on both a platform- and an ecosystem-level.
“In platform markets competition is present on both a platform-and an ecosystem-level (Cennamo, 2021;Hänninen & Smedlund, 2021).”
From Digital platform ecosystems in flux: From proprietary digital platforms to wide-spanning ecosystems (2023) · cites this paper as Cennamo, 2021
Platform size and control over the market composition, sometimes called market architecture, comprise sources of competitive advantage.
“Furthermore, the platform size and control over the market composition, sometimes called market architecture, comprises sources of competitive advantage (Cennamo, 2021).”
From Digital platform ecosystems in flux: From proprietary digital platforms to wide-spanning ecosystems (2023) · cites this paper as Cennamo, 2021
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“While there is a trade-off between market reach and financial success given the varied positioning of the platforms (Cennamo, 2019), both present equally appealing opportunities to app developers (Bresnahan”
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- Authors
- Cennamo, C.
- Affiliations
- Copenhagen Business School (DK)
- Corresponding author
- Cennamo, Carmelo
- ORCID
- Cennamo, Carmelo
- Venue
- Academy of Management Perspectives
- Publisher
- Academy of Management
- Published
- 2021-05
- Volume
- 35
- Issue
- 2
- Pages
- 265-291
- ISSN
- 1558-9080 (ISSN-L)
- 1943-4529
- OpenAlex
- W2964635765
- Cited by
- 487
- References
- 65
- Citations by year
- 2026: 86 · 2025: 95 · 2024: 117 · 2023: 58 · 2022: 53 · 2021: 31 · 2020: 42 · 2019: 3 · 2014: 1
- FWCI
- 49.65
- Type
- journal article
- Language
- en
- Open access
- green
- papers.ssrn.com
- Locations
- Academy of Management Perspectives (publishedVersion)
- SSRN Electronic Journal (submittedVersion)
- CBS Research Portal (Copenhagen Business School) (submittedVersion)
- Topics
- Social Sciences › Business, Management and Accounting › Strategy and Management › Digital Platforms and Economics
- Social Sciences › Business, Management and Accounting › Strategy and Management › Diverse Legal and Medical Studies
- Social Sciences › Sociology and Political Science › Digital Economy and Work Transformation
- Keywords
- platform competition, digital markets, platform size, competitive dynamics, platform-based services, market convergence, market boundaries
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