Platform-based competition has fundamentally transformed competitive dynamics in digital markets by shifting the locus of rivalry from firm-level products to multi-sided ecosystems sustained by network effects and orchestrated participation. This integrative review synthesizes theoretical and empirical insights from peer-reviewed scholarship to examine how digital marketplaces, network externalities, and ecosystem strategies reshape value creation, competitive advantage, and strategic positioning. Early foundations in two-sided market theory established the centrality of cross-side and same-side network effects in driving platform scale and winner-take-most outcomes. Subsequent scholarship advanced understanding of platform envelopment, multihoming, complementor dynamics, and governance tensions between openness and control. The review identifies persistent strategic paradoxes: platforms must simultaneously encourage generativity to fuel innovation while safeguarding value appropriation and architectural integrity. By organizing the literature into a conceptual synthesis, the paper illuminates the interdependent layers through which platform leaders coordinate users and complementors, navigate openness-control trade-offs, and evolve in response to competitive feedback. Contributions include bridging fragmented perspectives across strategy, information systems, and economics, highlighting the temporal evolution from network effects to ecosystem orchestration, and delineating future research directions for platform evolution amid rapid technological change and regulatory scrutiny. The analysis underscores that sustainable competitive advantage in platform markets derives less from proprietary assets than from dynamic capabilities in governance, orchestration, and adaptive ecosystem design.
The digital economy has fundamentally altered the foundations of competitive strategy, shifting firms from reliance on scarce physical and intangible resources toward data-rich environments where advantage stems from continuous data accumulation, analytics, and platform-mediated interactions. This theory-development article synthesizes recent literature on digital platforms, big data analytics, and ecosystem dynamics to propose new logics of competitive advantage characterized by speed, scale, learning, and connectivity. Traditional resource-based and positioning views are transformed as firms leverage data as a generative resource, platforms as coordination mechanisms, and algorithms for real-time adaptation. The article identifies key mechanisms driving this shift: data-driven resource reconfiguration, network effects amplifying scale advantages, algorithmic competition enabling dynamic strategic adjustment, and ecosystem positioning fostering connectivity. Five theoretical propositions articulate these relationships, culminating in a conceptual model illustrating the evolutionary trajectory from traditional to data-driven strategies. By highlighting feedback loops of continuous learning and adaptation, the framework explains how firms sustain advantage in volatile, data-intensive markets. Contributions include a reconceptualization of competitive logics in the digital era and implications for strategic management in platform-dominated ecosystems.
In digitally networked economies, competitive advantage has shifted from firm-level resources to ecosystem-level orchestration, where platform leaders and complementors navigate interdependent value creation and capture. This theory-development article synthesizes recent advances in platform research to propose an evolutionary framework that explains how competitive advantage emerges, sustains, and erodes across three stages: firm-centric, platform-centric, and ecosystem-centric competition. Drawing on network effects, multi-sided market dynamics, and governance mechanisms, the framework highlights strategic positioning within platform hierarchies as the central driver of sustained advantage. Five core propositions articulate causal relationships between network intensity, complementor dependence, data-driven feedback loops, and value-capture asymmetry. The analysis reveals that platform leaders maintain dominance not through ownership of scarce resources but through selective promotion of complements, ecosystem governance, and orchestration of indirect network effects. Complementors, in turn, secure advantage by exploiting platform openness while mitigating lock-in risks. By integrating insights from peer-reviewed studies, this article advances a novel theory of ecosystem-driven competitive advantage that accounts for the dynamic interplay of technological affordances, strategic interdependence, and regulatory pressures. The resulting framework offers actionable guidance for platform leaders and complementors seeking to reposition within rapidly evolving digital markets.
Institute for Management, Business, and Accounting Studies