Design Rules, Volume 2

How the innate physical properties of different technologies influence the strategy and structure of the organizations implementing the technologies, the sequel to In Baldwin then investigates the dynamics of strategy for firms in platform ecosystems. Such firms create value by solving technical bottlenecks--technical barriers to performance that arise in different parts of the system as it evolves. They capture value by controlling and defending strategic bottlenecks--components that are (1) essential to the functioning of some part of the system; (2) unique; and (3) controlled by a profit-seeking enterprise. Strategic bottlenecks can be acquired by solving technical bottlenecks. They can be destroyed via tactics such as substitution, reverse engineering, bypassing the bottleneck, and enveloping a smaller bottleneck within a larger one. Strategy in platform ecosystems can thus be viewed as the effective management of technical and strategic bottlenecks within a modular technical system.

Auteur

Carliss Y. Baldwin