Winner-Take-All Strategy in Digital Platform Market: A Theoretical Exposition

Abstract

Industries are witnessing the growth of and transition to digital platform marketplaces from traditional network markets. These markets offering products as varied as smartphones, credit cards among others and services as varied as ride-hailing, food delivery among others are influenced by network effects and other factors unique to these markets. The literature on these unique factors has popularized a hypothesis that competition in the digital platform market pushes firms to adopt a get-big-fast strategy which is likely to result in winner-take-all outcome. However, the unconditional, winner-takes-all hypothesis has perplexed many practitioners as several standards of products and services have prevailed in recent competitions in some IT platform industries. This leads to the research question of our study: do these findings suggest a shift in the platform market dynamics such that winnertake-all is no longer the standard? To achieve the objective of this paper existing research papers on digital platforms from the field of strategic management and case studies from Harvard Business Review, Fortune and Business Week were referred. The present study will help managers to employ significantly different strategies than those that were successful in the past.