Publication Type

Journal Article

Version

publishedVersion

Publication Date

7-2024

Abstract

Research SummaryThis study contrasts traditional entry dynamics with platform owner entry into a complementor market and examines cross-platform complementor response to competition with the platform. Generalists experience low repositioning cost and are more likely to shift effort away, while specialists focus their effort on the focal platform. We examine Apple's “Files” app entry and find support for our hypotheses: generalists shift effort toward the competing platform, while specialists double down on the focal platform. Moreover, empirically comparing Apple's entry with that of other large firms, we find that only the platform owner elicits a strong complementor response. This article contributes to the competitive and corporate strategy literatures, underscoring how complementor heterogeneity affects cross-platform allocation of effort when the platform owner becomes a competitor in complementor spaces.Managerial SummaryGiven the growing managerial and regulatory interest in competitive arenas on digital platforms, we analyze how firms respond to competition with the platform owner. We hypothesize that platform-enabled firms (complementors) with an outside option—those who also operate on a different platform—reposition, while firms only focused on a single platform double down. Examining the case of the “Files” app on Apple's App Store, we find support for these predictions. We also study other large firm entries on App Store (by Microsoft and SanDisk), but do not observe a meaningful response by complementors. We describe how market entry by the platform owner differs from traditional entry and argue stakeholders may benefit from a deeper understanding of the unique nature of competing with a platform.

Keywords

complementor heterogeneity, multihoming, platform owner entry, repositioning cost, specialist and generalist firms

Discipline

Entrepreneurial and Small Business Operations | Strategic Management Policy

Research Areas

Strategy and Organisation

Areas of Excellence

Digital transformation

Publication

Strategic Management Journal

Volume

45

Issue

12

First Page

2577

Last Page

2607

ISSN

0143-2095

Identifier

10.1002/smj.3643

Publisher

Wiley

Additional URL

https://doi.org/10.1002/smj.3643

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