Can firms challenge critical mass in multi-sided platform markets?

I came across this nicely written piece about platform markets – “From Netscape to eHarmony: The High Risks and Big Rewards of Platform Markets” on http://strategy-business.com

Technology eco-systems are common in markets with multi-sided business models – For e.g the smartphone app-store connecting developers & phone-users, online-marketplace & storefronts connecting buyers & sellers.

The article introduces the term ‘tipping point’ – an alternate representation of a critical mass of users needed to create positive network effects. An interesting question raised herein is: How can you identify a platform market that is attractive to enter, and under which conditions is it appealing? Defining the granularity of the market & bringing in the right competitive advantage is one route to answering this.

Firms looking to displace dominant incumbents – be it in the smart phone industry, television industry, eCommerce industry or others – must think through the value proposition to switch current users.

Click Here for the original and complete article

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