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Mutualism and the dynamics of new platform creation: A study of Cisco and fog computing
The increasing pervasiveness of digital platforms are driving established firms to reboot their strategy to embrace emergent forms of competition, collaboration, and mutual coexistence.
How firms respond to the emergence of dominant platforms that undermine their competitiveness remains a strategic puzzle. Our longitudinal study shows how one incumbent, Cisco, responded to such a challenge by creating a new platform, Fog, without undermining the dominant platform, Cloud, where it played a complementor role. By developing a process model we reveal how a firm in a peripheral role in a platform ecosystem can reposition itself through a dynamic mix of material, symbolic and institutional actions to develop and legitimize an alternative platform. This can be done first through symbiosis with the dominant platform, then partial competition with it. We theorize the value of a mutualistic “rising tide lifts all boats” strategy in contrast to hostile “winner takes all” approaches.
Khanagha, S., Ansari, S., Paroutis, S., & Oviedo, L. (2022). Mutualism and the dynamics of new platform creation: A study of Cisco and fog computing. Strategic Management Journal, 43(3), 476-506. https://doi.org/10.1002/smj.3147