Abstract
Scholars have been investigating the quick emergence of digital platforms, essentially through the lens of digital native firms. If there is limited occurrence of platforms launched by incumbent firms such as Daimler (Car2Go, Moovel) or Johnson Controls (Panopix), the economics of their strategic responses through platforms by incumbents merit attention. This paper provides the first large-scale empirical evidence on the incidence, nature and profitability of incumbent platforms. Our contribution is threefold: (1) only 10 to 30% of incumbent firms have already engaged in some platform play, with substantial heterogeneity across industries, however; (2) incumbent firms engage in such strategies with a strong focus on their supply chain, suggesting that their platform initiatives are biased toward supply-side economies of scale, rather than demand-side; and (3) platform strategies contribute to revenue and/or profit growth only when they are combined with a priority attached to the demand-side of the business (i.e. customers, instead of the supply chain), typically through the unbundling or rebundling of products or services, and are part of an offensive digital strategy at scale. These results are robust to a Heckman-selection equation and a number of changes to the specification and key measures.
Sign-in/Register to access full text options 
Talk to us
Join us for a 30 min session where you can share your feedback and ask us any queries you have
Schedule a callDisclaimer: All third-party content on this website/platform is and will remain the property of their respective owners and is provided on "as is" basis without any warranties, express or implied. Use of third-party content does not indicate any affiliation, sponsorship with or endorsement by them. Any references to third-party content is to identify the corresponding services and shall be considered fair use under The CopyrightLaw.
