Platform competition and strategic trade-offs for complementors: Heterogeneous reactions to the entry of a new platform

Deskripsi

As competition between digital platforms intensifies, complementors firms that provide complementary products or services mustadjust how they engage with platform owners. The entry of a rival platform creates both opportunities and risks: it offers an alternative with less intense competition but also fragments the user base that underpins network benefits. We find that these opposing effects shape complementors' behavior differently. Those with fewer strategic resources are more likely to join the new platform and become less willing to follow thein cumbent's coordinated initiatives. In contrast, complementors whose products rely strongly on network effects tend to remain with the incumbent and cooperate more closely with its orchestration efforts. For managers, this highlights that platform competition not only shifts market dynamics but also reshapes the motivations and strategies of heterogeneous complementors.