Correcting positioning deviation through platform service innovation: Realisation mechanisms and design principles

The discrepancy between platform positioning and user needs, termed positioning deviation, is a critical determinant of user churn and potential platform failure. Platform service innovation can be potential remedy to correct positioning deviation. As such, understanding the mechanisms and design principles underlying such platform service innovation for correcting positioning deviation is crucial. Addressing this, this study adopts a systematic problem analysis approach, adhering to the sequence of ‘user churn → positioning deviation correction → service innovation.’ First, a duopoly competition model is constructed to clarify why platform positioning deviation leads to user churn and platform failure. Next, service innovation is embedded into the user utility function to expand the original model, while the mechanisms for realising positioning deviation correction through platform service innovation is revealed via numerical calculation. Finally, taking the optimal innovative service type under quality demand as an example, simulation analysis is performed on each characteristic parameter’s influence. Further, the design principles of platform service innovation for correcting positioning deviation are explored, and subsequently, validated through application cases. The results reveal that platform managers can effectively address positioning deviation by providing personalised and diversified innovative services. The core of service innovation design is based on several parameters, including the demand state when positioning deviation occurs, strength of the cross-side network effect, degree of user heterogeneity, platform development cost required by the unit service, additional value of the platform, buyer utility increased by the unit service, and seller development cost increased by the unit service. Overall, the study offers valuable insights for managers to drive service innovation through adaptive dynamic matching, critical parameter control, utility-cost optimisation, and strategic digital marketing.