Platform rules : a case study of Samsung’s failure in the smartphone platform industry
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By investigating Samsung’s platform strategies, organizational culture and control mechanisms in the Android ecosystem, this research provides a balanced view on the global smartphone platform industry. In addition, this dissertation provides both empirical evidence and critical explanations by exploring the challenges of global leading manufacturer Samsung, especially Samsung’s Media Solution Center (hereinafter, MSC) which was in charge of software and platform services of the company. In the literature review and methodology chapter, this study reviews 1) how successful platform providers actually control other platform participants, 2) how they develop platform ecosystems and extend their businesses, 3) how a fast follower strategy which is considered a typical strategy of Samsung Electronics affects business performance, and 4) how cultural elements of organizations affect the performance of a company, especially an ICT firm. This research poses three research questions: RQ 1: How did Samsung’s platform strategies such as the fast follower strategy affect MSC’s platform services? RQ 2: How did the platform governance and control mechanisms in the global smartphone industry influence Samsung’s platform services? And RQ 3: How did the organizational culture of Samsung and MSC influence Samsung’s platform businesses? The research relies on interviews with 25 platform experts who once designed and worked on platform services such as Samsung Apps or Bada in Samsung’s MSC. This study basically explores business experiences of Samsung’s MSC whose challenges were not successful. Since Samsung’s attempts to control a platform failed, this research is in part a study of failure. In this it deviates from the typical study that pays much attention to the winner’s position or experience rather than that of a loser. Based on the interview data, this research provides significant findings. First, Samsung’s strategy of being the fastest follower generated positive network effects for the Google Play Store instead of Samsung’s platforms. Second, Google tightly controlled its competitors’ platform services in diverse (somewhat unfair) ways in order to maintain its dominance. Lastly, Samsung’s hierarchical and micromanaging organizational culture exerted negative influence on MSC’s platform services.