A New Entry Strategy for Markets with Incumbent Platforms

－A Case for a New Entry into the Online Recipe Service Market－

Abstract

In recent years, it has often been a phenomenon that emerging startups enter into a product/service market where an incumbent platform (PF) has already grown to a certain scale and has gained a certain market share. Although prior studies on platform businesses have explained how multiple PF firms coexist in the same product/service market, a few studies discuss new entry strategies. This paper focuses on “the specific features” of both incumbent PF and latecomers. Specifically, we analyzed 1) how latecomers’ specific features can create new value propositions and generate new demand, 2)how latecomers can create barriers for imitation by incumbent PF and they can sustain differentiation through their specific features. The conclusion of this paper is as follows. When incumbent PFs expand and are not able to meet market demand increases if the late entrant’s specific features could provide a new value proposition to a portion of the unmet demands, the demand will emerge and the late entrant will succeed in entering the market. In addition, if the specific features of the late entrant have “indirectness” to the specific features of the incumbent PF and user trends, the differentiation strategy of the late entrant will be sustained.