A1 Refereed original research article in a scientific journal
Dynamics of two-sided platform success and failure: An analysis of public wireless local area access
Authors: Casey TR, Toyli J
Publisher: ELSEVIER SCIENCE BV
Publication year: 2012
Journal: Technovation
Journal name in source: TECHNOVATION
Journal acronym: TECHNOVATION
Volume: 32
Issue: 12
First page : 703
Last page: 716
Number of pages: 14
ISSN: 0166-4972
DOI: https://doi.org/10.1016/j.technovation.2012.08.003(external)
Abstract
This article aims to analyze the strategic management of two-sided platforms from the view point of a mobile communications platform manager and elaborate on the dynamics that result in either platform success or failure. A framework is created to model the endogenous formation and diffusion process of a two-sided platform, describing the interplay of strategy levers that platform managers have at their disposal and factors affecting user willingness to create platform affiliation. The framework is applied to the diffusion of public wireless local area access services and configured with extensive data reflecting a large European city and platform deployment costs. The results show the effect of subsidization, revenue sharing, and alliance strategies and highlight the importance of understanding feedback structure and dynamic complexity around two-sided platforms. The results also point out how strategy opportunities vary for different types of platform managers, for example mobile operators extending their mobile infrastructure or large internet companies managing adjacent service platforms and striving for disruptive platform envelopment. (C) 2012 Elsevier Ltd. All rights reserved.
This article aims to analyze the strategic management of two-sided platforms from the view point of a mobile communications platform manager and elaborate on the dynamics that result in either platform success or failure. A framework is created to model the endogenous formation and diffusion process of a two-sided platform, describing the interplay of strategy levers that platform managers have at their disposal and factors affecting user willingness to create platform affiliation. The framework is applied to the diffusion of public wireless local area access services and configured with extensive data reflecting a large European city and platform deployment costs. The results show the effect of subsidization, revenue sharing, and alliance strategies and highlight the importance of understanding feedback structure and dynamic complexity around two-sided platforms. The results also point out how strategy opportunities vary for different types of platform managers, for example mobile operators extending their mobile infrastructure or large internet companies managing adjacent service platforms and striving for disruptive platform envelopment. (C) 2012 Elsevier Ltd. All rights reserved.