Managing proprietary and shared platforms

California Management Review

Volumn 50, Issue 4, 2008, Pages 31-53

  Eisenmann, Thomas R ^a  

^a HARVARD BUSINESS SCHOOL   (United States)

Author keywords

[No Author keywords available]

Indexed keywords

EID: 51649106496     PISSN: 00081256     EISSN: None     Source Type: Journal    
DOI: 10.2307/41166455     Document Type: Review

References (26)

1. Platform strategies are examined in the following books and articles that do not require advanced economic training: David Evans and Richard Schmalensee, The Catalyst Code: The Strategies Behind the World's Most Dynamic Companies (Boston, MA: Harvard Business School Press, 2007);
2. Thomas Eisenmann, Geoffrey Parker, and Marshall Van Alstyne, "Strategies for Two-Sided Markets," Harvard Business Review, 84/10 (October 2006): 92-101;
3. David Evans, Andrei Hagiu, and Richard Schmalensee, Invisible Engines: How Software Platforms Drive Innovation and Transform Industries (Cambridge, MA: MIT Press, 2006);
4. Marco Iansiti and Roy Levien, The Keystone Advantage: What the New Dynamics of Business Ecosystems Mean for Strategy, Innovation, and Sustainability (Boston, MA: Harvard Business School Press, 2004);
5. Annabelle Gawer and Michael Cusumano, Platform Leadership: How Intel, Microsoft, and Cisco Drive Industry Innovation (Boston, MA: Harvard Business School Press, 2002).
6. For additional analysis of factors that influence the decision to pursue proprietary control of a new platform or share it with rivals, see Stanley Besen and Joseph Farrell, "Choosing How to Compete: Strategies and Tactics in Standardization," Journal of Economic Perspectives, 8/2 (Spring 1994): 117-131;
7. Carl Shapiro and Hal Varian, "The Art of Standards Wars," California Management Review, 41/2 (Winter 1999): 8-32.
8. Joseph Farrell and Nancy Gallini, "Second-Sourcing as a Commitment: Monopoly Incentives to Attract Competition," Quarterly Journal of Economics, 103/4 (1988): 673-694.
9. For additional analysis of factors that lead to winner-take-all outcomes in networked markets, see Carl Shapiro and Hal Varian, Information Rules: A Strategic Guide to the New Economy (Boston, MA: Harvard Business School Press, 1998);
10. Thomas Eisenmann, "Winner-Take-All in Networked Markets," Harvard Business School note #806-131, 2006.
11. Joseph Farrell and Garth Saloner, "The Economics of Horses, Penguins, and Lemmings," in L.G. Gable, ed.. Production Standardization and Competitive Strategies (Amsterdam: North-Holland, 1987).
12. The concept of marquee users in the context of two-sided markets is introduced in Jean Charles Rochet and Jean Tirole, "Platform Competition in Two-Sided Markets," Journal of the European Economic Association, 1/4 (June 2003): 990-1029.
13. For additional analysis of exclusive contracts, see Mark Armstrong and Julian Wright, "Two-Sided Markets, Competitive Bottlenecks and Exclusive Contracts," Economic Theory, 32/2 (August 2007): 353-380.
14. For non-technical reviews of pricing issues in two-sided networks, see in Evans and Schmalensee [op. cit., chapter 4] and Eisenmann, Parker, and Van Alstyne [op. cit.]. For formal economic models, see Rochet and Tirole [op. cit.]; Geoffrey Parker and Marshall Van Alstyne, "Two-Sided Network Effects: A Theory of Information Product Design," Management Science, 51/10 (October 2005): 1494-1504;
15. Andrei Hagiu, "Pricing and Commitment by Two-Sided Platforms," RAND Journal of Economics, 37 (2006): 720-738.
16. For an introduction to conjoint analysis, see Robert Dolan, "Conjoint Analysis: A Manager's Guide," Harvard Business School note 590-059, 1990.
17. For an example of how conjoint analysis can be used to project the evolution of a networked market, see Sachin Gupta, Dipak Jain, and Mohanbir Sawhney, "Modeling the Evolution of Markets with Indirect Network Externalities: An Application to Digital Television," Marketing Science, 18/3 (1999): 396-416.
18. See Thomas Eisenmann and Joseph Bower, "The Entrepreneurial M-Form: Strategic Integration in Global Media Firms," Organization Science, 11/3 (May/June 2000): 348-355.
19. For a discussion of tradeoffs between profiting from IP versus implementation, see Timothy Simcoe, "Open Standards and Intellectual Property Rights," in Henry Chesbrough, Wim Vanhaverbeke, and Joel West, eds., Open Innovation: Researching a New Paradigm (London: Oxford, 2006).
20. Rosemarie Ziedonis, "Don't Fence Me In: Fragmented Markets for Technology and the Patent Acquisition Strategies of Firms," Management Science, 50/6 (June 2004): 804-820.
21. See Carl Shapiro, "Navigating the Patent Thicket: Cross-Licenses, Patent Pools, and Standard-Setting," in Adam Jaffe, Josh Lerner, and Scott Stern, eds., Innovation Policy and the Economy (Cambridge, MA: National Bureau of Economic Research, 2001).
22. Josh Lerner and Jean Tirole, "Efficient Patent Pools," American Economic Review 94/3 (June 2004): 691-711.
23. See Josh Lerner and Jean Tirole, "A Model of Forum Shopping, with Special Reference to Standard-Setting Organizations," Harvard NOM working paper no. 04-35, 2004.
24. Sometimes, industry participants create ad hoc associations to work in tandem with established standards-setting organizations. Often, associations are organized by industry leaders seeking to protect their interests from "mob rule" in SSOs or to speed SSO efforts. The Web Services Interoperability Organization (WS-I), for example, endorses technical proposals under review by the World Wide Web Consortium and other Internet SSOs. WS-I endorsement can give a proposal an air of inevitability, thereby usurping the power of SSO technical committees.
25. For analysis of the advantages of hybrid forms in standards-setting processes, see Joseph Farrell and Garth Saloner, "Coordination through Committees and Markets," RAND Journal of Economics, 19/2 (Summer 1988): 235-252.
26. Garud et al. explore the social and political challenges facing the architect of a shared platform during the mobilization and maintenance phases of its life cycle. Raghu Garud, Sanjay Jain, and Arun Kumaraswamy, "Institutional Entrepreneurship in the Sponsorship of Common Technological Standards: The Case of Sun Microsystems and Java," Academy of Management Journal, 45/1 (February 2002): 196-214.