1. In the time frame of the years covered by the HBS case, how should PayPal allocate investments between the merchant and consumer sides of its platform? Make sure to justify your answer.
2. Identify three strategies that firms can pursue at the early stages of a platform market with strong two-sided network effects that is likely to ultimately be served by 1-2 dominant platforms. Consider firms that have entered at the early/launch stage (e.g., PayPal at the timeframe of the case competing to process payments for online purchases). The goal of these firms is to achieve dominance, or at least avoid having to exit the market. For each of these strategies briefly explain (a sentence will do) why it will help the firm compete in the platform market.

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1 Investment Allocation for PayPal PayPal should prioritize balancing investments between the mercha... View the full answer