Amid a variety of concepts focusing on platforms ecosystems, the question of how to capitalize on a platform from the perspective of a focal firm—the platform leverage—remains a key question. This study proposes the notion of partial compatibility as a novel mechanism of platform leverage. Partial compatibility consists of intra-platform envelopment and platform involvement by connecting with the different platforms owned by complementors. We argue that partial compatibility enables the follower to establish a sustainable competitive advantage, even though the install base might be smaller. We investigate the case of the FeliCa-based contactless integrated circuit payment system in Japan. Our empirical analysis is based on a longitudinal historical dataset from 1988 to 2017 and interviews with 29 executives involved in the ecosystem.
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