Market entry strategy for a digital platform provider

Abstract

Purpose

How can a digital platform provider successfully secure users in its early stage to build an ecosystem? The purpose of this paper is to explore this issue through a case study on the deployment of the digital platform service RecordFarm and identifies the reasons behind its successful market access, overcoming the chronic chicken-egg problem in a two-sided market.

Design/methodology/approach

The study empirically analyses the core user groups’ diffusion and usage rates by using a susceptible-infectious-recovery model of an epidemic based on a user survey and extensive archival data from the RecordFarm database.

Findings

The study identifies two important early stage characteristics for a business platform to be successful: the core users’ activities on the platform are a critical element for the network’s expansion and usage, and user relationships are more important than user contents on the digital platform.

Originality/value

This study confirms that organic interactions through active behaviours, such as visit frequency, uploading contents, and comment activities, are core elements for a successful digital platform to settle in the market early in the face of the difficulties of a two-sided market.

Citation

Kim, J. (2018), "Market entry strategy for a digital platform provider", Baltic Journal of Management, Vol. 13 No. 3, pp. 390-406. https://doi.org/10.1108/BJM-07-2017-0228