The Fog of Strategy-How to Shape the Emergence of a New Platform Ecosystem by Drafting off Another

Abstract

Established firms aspiring an alternative to a technological platform that undermines their competitive position confront the dilemma of seeking their own economic interests and gaining legitimacy among ecosystem actors. We examine the evolving nature of this dilemma and the ways through which firms can address it through a longitudinal study of Cisco’s response to the rapid rise of “Cloud” platform that outpaced its core technologies and business models. Our analysis illuminates the process through which Cisco navigated the tensions between economic and legitimacy interests by adjusting the contents and framing of its strategy so as to initiate and cultivate an alternative platform that drafts off, but does not interrupt, the existing platform’s success. We theorize how patterns of platform strategies and legitimacy building activities is changing over time in response to evolution of the platform and competing demands from the ecosystem. By doing so, we illuminate the firm strategies through which aspiring platform developers may reconcile paradoxical demands for novelty versus familiarity and control versus openness and, by that, encourage platform membership and application.