Assessing incumbents' risk of digital platform disruption

By re-architecting markets, digital platforms can significantly disrupt incumbents' businesses. We identify three characteristics of markets that digital platforms exploit to gain a foothold in existing markets: inefficiencies caused by asymmetric, fragmented and complex information; the modular nature of offerings; and unaddressed heterogeneous customer preferences. We provide a tool that incumbents can use not only to assess the risk of digital platform disruption, but also to identify digital platform-related opportunities.(1,2,3