Digital Platform Strategy: A Theory Primer with Selected Conceptual Add-ons

This primer is intended to serve as a background text for a 'platform chapter' in Bachelor or Master level courses on Strategic Management. While the 'traditional firm' can be described as a value-adding chain (Pipeline), platform businesses 'invert' production and consumption to the outside and in essence 'manufacture' transactions. The constitutive drivers of the platform competition and the platform economy are network effects which come in different types and varying geographic reach. There is a very wide variety of different types of platform businesses, however on a fundamental level it makes sense to distinguish transaction (exchange) and innovation (maker) platforms. 'Platform strategy analysis' is still at an early stage, it is focused on 'single platforms', and it is still a 'moving target'. The large dominant players like Google, Amazon, Microsoft, Apple and others expand and defend their dominant positions through complex 'multi-platform strategies'. Early-stage platform Start-ups on the other hand must overcome the 'chicken-or-egg' problem with various strategies and tactics. In the internationalization strategy of platforms two archetypes, country-by-country (or multidomestic) and global (globally integrated) strategies, prevail in platform markets. There is a need for platform regulation by governments and the EU in five different domains: antitrust policy, publishing (hate speech, fake news), data ownership/privacy, labour market, tax avoidance.