The Rise and Fall of App Stores: How and Why Product Platforms Pivot

Established product companies increasingly embrace platforms in the form of app stores to enhance their products through digital services. However, succeeding with such endeavors and introducing a successful product platform poses significant challenges and puts managers responsible under considerable pressure. Over four years, we have accompanied three product companies in establishing profound product platform businesses. In doing so, we derived insights into how and why product platforms pivot in realizing an app store on top of their physical products. Our research emphasizes how these companies shifted from embracing a broad ecosystem of third-party developers to forming strategic partnerships and focusing on established products as innovation foundations. Moreover, we present actionable managerial recommendations for managers venturing product platforms. Thereby, we guide managers being confronted with managing the ambidexterity involved in establishing platform business in addition to product business.