Platform envelopment
By: Thomas Eisenmann, Geoffrey Parker, Marshall Van Alstyne
Contributors: Parker, Geoffrey; Van Alstyne, Marshall; Harvard Business School
Edition: 2nd rev.
Series: Working paper / Harvard Business School -- 07-104; Working paper (Harvard Business School) -- 07-104.
Publisher: Harvard Business School
Published: 2009
Place of publication: [Boston]
Language: eng
Number of pages: 24
Description: Due to network effects and switching costs, platform providers often become entrenched. To enter established markets, aspiring providers of new platforms generally must offer revolutionary functionality. We explore a second path to entry that does not rely on Schumpeterian innovation: platform envelopment. By leveraging shared user relationships and common components, 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 can be vulnerable to an adjacent platform provider's envelopment attack. We develop a taxonomy of envelopment attacks and analyze conditions under which they are likely to succeed.
Notes: "June 2007, revised September 2008, October 2009"--Publisher's website.

Includes bibliographical references.