Reclaiming Control on Strategic Bottlenecks in Dominant Platform Ecosystems

Abstract

Prior research emphasizes platform governance for continuity such as ensuring backward compatibility, engaging in frequent, incremental updates that leverage demand-side economies of scale and learning, and exerting competitive pressure on complementors. Such governance strategies aim to preserve the status quo, but they do not explain how a platform sponsor can respond when they have lost control over strategic bottlenecks, when the balance of governance has collapsed into value capture by partners. We develop a theoretical process model that explains how a platform sponsor reclaims control over strategic bottlenecks. By rendering the old platform ecosystem technologically incompatible and obsolete (a separating strategy), stopping licensing and technical support to ban further growth (a blocking strategy) and absorbing critical compliance layers (an enveloping strategy), the platform sponsor structurally dissolves competition. We contribute to research on platform governance by identifying a distinct, radical mode of governance used not to balance tensions among ecosystem actors, but to resolve them through systemic restructuring. We conclude with implications for further research.

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