PLATFORM ECONOMY AS AN INEVITABLE DEVELOPMENT OF DIGITAL BUSINESS

Abstract

The growth of digital platforms generates strong network effects and dynamics of all winners, which disrupts systemic growth and further stimulates competition between them. Despite the positive effects, under certain conditions, these same functions make the currently operating platforms vulnerable to competitive strategic moves through platforms where participants can add value for themselves and at the same time avoid pre-investment in value added generation. In this analysis, we use an interpretive synthesis of different theoretical concepts of platform business to theorize these strategies as a new category and their distinctive features. Overall, the study demonstrates the potential for unconventional and opportunistic strategies to compete on platforms that extend beyond more traditional ones, such as network quality, diversity and size.