In recent years new technologies within IT have been developed and launched at a rapid pace, enabling both incumbent firms and startups to foster new businesses and business models. Among these, a prominent example is a digital platform. Digital platforms face competitive dynamics different from traditional companies. These include strong network effects, high multi-homing costs, and no need for special features, all of which have the potential to create winner-take-all dynamics that makes it difficult a second-mover to challenge an established platform. This thesis examines how platform specific dynamics influence a second-mover’s opportunity to challenge the incumbent platform in the market. It discusses how winner-take-all dynamics affect the competitive situation, and how company resources can be employed in such attack strategies. To further explore the theory, a case study of the Danish market for mobile payment is conducted to investigate the utility of the theory in practice. The study analyses what the second-mover, Swipp, can do to challenge the dominating platform, MobilePay. Based on the above analysis, this thesis finds that the mobile payment market has no clear winner-take-all dynamics, why it is feasible for a second-mover to challenge the first-mover. Further, it argues that MobilePay has a competitive advantage in their critical mass of users, whereas Swipp has a potential competitive advantage from their cost structure and that these resources should affect their attack strategy. Finally, the thesis argues that the low number of competitors in the market intensifies the competition, as awareness, motivation and capabilities to attack are high. This thesis concludes that significantly strong first-mover advantages can be established in the platform market, why second-movers might not always be able to challenge a first-mover. Even so, the analysis suggests a strategic path, which might allow Swipp to establish itself as a stronger second-mover, as new competitors are about to enter the market within the next months.
|Educations||MSc in Management of Innovation and Business Development, (Graduate Programme) Final Thesis|
|Number of pages||121|
|Supervisors||Jens Frøslev Christensen|