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Defensive Competitive Strategies in Two-Sided Markets: The Example of the Mail Industry

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  • H.M. Dietl
  • A. Grütter
  • M. Lutzenberger

Abstract

This paper outlines and analyzes different competitive strategies for an established platform provider in a two-sided market to defend against various forms of attack. Taking into account the characteristics of two-sided markets, we consider strategies based on product innovation and network effects, process innovation and pricing, multiple platforms, and switching costs. Network effects introduce dynamics that can quickly displace an incumbent platform. However, a platform provider can also use network effects to its advantage, entrenching itself firmly in the market by using appropriate strategies. These strategies are developed theoretically and illustrated by example of the mail industry.

Suggested Citation

  • H.M. Dietl & A. Grütter & M. Lutzenberger, 2009. "Defensive Competitive Strategies in Two-Sided Markets: The Example of the Mail Industry," Competition and Regulation in Network Industries, Intersentia, vol. 10(1), pages 3-16, March.
    • Handle: RePEc:sen:journl:v:10:i:1:y:2009:p:3-16
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    Cited by:

    1. Vincenzo Visco Comandini, 2007. "Servizi postali," Rivista di Politica Economica, SIPI Spa, vol. 97(4), pages 257-314, July-Agou.
    2. Agam Gupta & Arqum Mateen & Divya Sharma & Uttam K. Sarkar & Vinu Cheruvil Thomas, 2019. "Combating incumbency advantage of network effects: The role of entrant’s decisions and consumer preferences," Competition and Regulation in Network Industries, , vol. 20(1), pages 3-32, March.
    3. Vincenzo Visco Comandini & Adolfo Consiglio & Stefano Gori & Emiliano Piccinin & Maria Rita Pierleoni, 2010. "The Altmark Ruling and Approaches to Measuring Efficiency of Postal Operators," Chapters, in: Michael A. Crew & Paul R. Kleindorfer (ed.), Heightening Competition in the Postal and Delivery Sector, chapter 5, Edward Elgar Publishing.
    4. Helmut M. Dietl & Urs Trinkner, 2008. "Developing Universal Postal Services in Latin America ? an Economic Perspective," Working Papers 0012, Swiss Economics, revised Nov 2008.

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