Platform & network effects · strategy atlas
Aggregation theory
what it means
Winning by owning the customer relationship and demand, then commoditising fragmented suppliers who compete to be included — inverting the traditional power balance between distributor and supplier.
a real example
Large online marketplaces and search engines aggregate enormous demand, which gives them leverage over the many individual suppliers competing to reach that same audience.
when to use it
Fragmented supplier markets with no dominant distribution channel, where owning the customer relationship — not the supply — becomes the real position of power.
when it backfires
Aggregators that grow too dependent on suppliers they don't control can be squeezed if those suppliers organise, integrate forward, or find another route to the same customers.