Platform envelopment
By: Thomas Eisenmann, Geoffrey Parker, Marshall Van Alstyne
Contributors: Parker, Geoffrey; Van Alstyne, Marshall; Harvard Business School. Division of Research
Series: Working paper / Division of Research, Harvard Business School -- 07-104; Working paper (Harvard Business School. Division of Research) -- 07-104
Publisher: Division of Research, Harvard Business School
Published: 2007
Place of publication: Boston
Language: eng
Number of pages: 24
Description: Due to network effects and switching costs, platform providers often become entrenched. To dislodge them, entrants generally must offer revolutionary products. We explore a second path to platform leadership change that does not rely on Schumpeterian creative destruction: platform envelopment. By leveraging common components and shared user relationships, one platform provider can move into another's market, combining its own functionality with the target's in a multi-platform bundle. Dominant firms otherwise sheltered from entry by standalone rivals may be vulnerable to an adjacent platform provider's envelopment attack. We analyze conditions under which envelopment strategies are likely to succeed.
Notes: "May 17, 2007"--Added t.p.

Includes bibliographical references.