This study conducts an empirical study on the geographical factors of platform strategy for global markets, using panel dataset of semiconductor equipment industry, which includes the transaction data between production equipment providers and semiconductor manufacturers from 1994–2007 when several equipment providers choose platform strategy to exploit the business opportunity of new technological generation. The empirical results supports that higher sales ratio in emerging markets increases the performance of platform strategy, providing evidence that high sales ratio in emerging markets positively and strongly interacts with two corporate actions of platform strategy (the adoption of open standards and the positioning in a hub of transaction network). This strong interaction indicates that high sale ratio in emerging markets is an essential requirement to leverage platform strategy for competitive advantage.
Scholars pointed out that there are two types of innovation and technical/organizational change. One is “incremental” the normal technical change often generated by existing firms, and the other is “radical” that sometime makes great extension in business environment and destroys the order of existing firms. Additionally, some scholars such as Tushman and Anderson (1986) measure the radicalness of innovations in industries. However, these measurements overlooked the impact of technical change, because these measurements are like technical breakthrough.
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