Platform Disruption : How Digital Platforms Re-Architect Existing Markets

Digital platforms represent a new, potent disruptive force in incumbents’ businesses by transforming the way markets work and by altering the modalities by which incumbents’ offerings are delivered to and both accessed and consumed by customers. Digital platforms tend to disrupt in two basic ways: creating new markets for existing services and introducing alternative services along with new marketplaces. How asymmetric, fragmented, and complex information is in a market, how modular offerings can be, and whether there are unexploited heterogeneous customer preferences determine the degree of digital platform disruption risk and its impact on incumbents’ businesses. We offer a framework to understand the key dimensions of digital platform disruption and a tool to assess its risk, one which can enable executives to identify the threats but also the opportunities associated with digital platform disruption