The Market that Never Was: Clashing Frames and Failed Coalitions in Mobile Payments

Abstract

In this paper, we focus on a key, but understudied process that affects the development of a new market: the interfirm negotiation process through which the interested parties agree on a business model to exchange resources in order to create the new product or service. We observed this process in the case of an emerging market around mobile payment services for over 40 months between 2006 and 2009. The results that emerge from our data illustrate that when several of the negotiating parties come from dominant positions in their distinctive markets, the development of the new market may come to a complete halt despite the readiness of the technology and proven consumer interest. We also show that when such deadlocks occur, the commercialization of the product may stop at the global level, but continue locally in places where the interdependency problem can be solved. By observing various countries, we describe three local pathways to commercialization: intrafirm coalitions, M&A, and the mediation of a trusted third party.

Keywords: market emergence, inter-firm negotiation, organizational frames, business models