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  • June 21, 2019
  • Article
  • Harvard Business Review (website)

When Tech Companies Compete on Their Own Platforms

By: Feng Zhu
  • Format:Electronic
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Abstract

One common complaint from third parties about platform businesses is that they see what succeeds on their platforms and then enter the most profitable areas themselves, often decimating third parties in the process. Studies have identified several motivations for platform-owner entry beyond just value capture. Multiple studies have suggested that platforms opt to enter directly in order to improve quality, for example. And the effect of platform entry on complementors is mixed. Some studies found that platform entry can create positive spillover effects on third parties and increase their demand. However, a few other studies find that the impact of entry on complementors can be negative. Google’s introduction of flights into its search engine decreased clicks on other organic results, for example. Careful empirical analysis is needed before policy intervention.

Keywords

Platform-based Markets; Platform-owner Entry; Market Platforms; Market Entry and Exit; Competition

Citation

Zhu, Feng. "When Tech Companies Compete on Their Own Platforms." Harvard Business Review (website) (June 21, 2019).
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About The Author

Feng Zhu

Technology and Operations Management
→More Publications

More from the Author

    • April 2021
    • Strategic Management Journal

    Homing and Platform Responses to Entry: Historical Evidence from the U.S. Newspaper Industry

    By: K. Francis Park, Robert Seamans and Feng Zhu
    • 2021
    • Faculty Research

    Time Dependency, Data Flow, and Competitive Advantage

    By: Ehsan Valavi, Joel Hestness, Marco Iansiti, Newsha Ardalani, Feng Zhu and Karim R. Lakhani
    • February 2021
    • Management Science

    Trust and Disintermediation: Evidence from an Online Freelance Marketplace

    By: Grace Gu and Feng Zhu
More from the Author
  • Homing and Platform Responses to Entry: Historical Evidence from the U.S. Newspaper Industry By: K. Francis Park, Robert Seamans and Feng Zhu
  • Time Dependency, Data Flow, and Competitive Advantage By: Ehsan Valavi, Joel Hestness, Marco Iansiti, Newsha Ardalani, Feng Zhu and Karim R. Lakhani
  • Trust and Disintermediation: Evidence from an Online Freelance Marketplace By: Grace Gu and Feng Zhu
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