**6. Platform strategy**

#### **6.1. Overview**

A platform strategy is an approach to entering a market that revolves around the task of allowing platform participants to benefit from the presence of others. In a traditional competitive strategy, it is generally assumed that customers can determine their willingness to pay for the product or the service independently. This assumption breaks down when studying platforms, as the participation of platform participants is interdependent with the choices of other users. This is why the formulation of a platform strategy requires somewhat distinct tools to help platform entrepreneurs and managers tackle the challenges of value creation and value capture [15]. Platforms present different strategic objectives than traditional frameworks for corporate strategy, which will often emphasize concepts like "lean" and "just-in-time" supply chain delivery. Platforms change what it means to lead organizations, forcing them to rethink their strategies, business models, leadership, organizational structures, and approaches to value creation and capture systems. Aiming to become a platform leader entails a vision that extends beyond one's own firm and aims to build and sustain in an ecosystem of partners, where the platform leader has to be the equivalent of a captain [11].

Platforms can thus be effective vehicles to create new value [13]. The risk is that they might also undermine the ability of individual companies to capture their fair share of the value being created, especially if they do not own the platform [13]. By creating a far more visibility into options and facilitating the ability of participants to switch from one resource or provider to another, platforms can commoditize business and constrain the margins of participants. The greatest opportunities for value capture on platforms require an understanding of influence points that can create and sustain sources of advantage and make it feasible to capture a disproportionate share of the value created on the platform. Influence points tend to emerge whenever and wherever relationships begin to concentrate on platforms. By having privileged access to a larger and more diverse array of knowledge flows, the company occupying an influence point has an opportunity to predict what is going to happen by seeing signals before anyone else does. That company is also better positioned to shape these flows in ways that can strengthen its position and provide greater influence. When you are in the center of flows, small moves, smartly made, can indeed set very big things into motion.

Where would these influence points tend to emerge on platforms? These points often provide a significant and sustainable functionality to the broader platform or ecosystem. For example, the broker positions in a market platform. It is also better if the functionality of these influence points evolves rapidly over time because it creates incentives for other participants to stay in close contact with the occupier of the influence point.
