The correct answer is D) When the platform sponsor decides to share control over quality and the overall product architecture with all the third-party vendors.
In a market, platforms become more desirable than tightly integrated products when there is a need for flexibility and customization. This is because platforms allow third-party developers to create complementary products and services that can integrate with the platform and offer additional value to customers. In this way, platforms can support a diverse range of products and services, which can be tailored to meet the specific needs of different customers.
When a platform sponsor decides to share control over quality and the overall product architecture with all the third-party vendors, it allows for greater flexibility and customization. This means that third-party developers can create products and services that are more closely aligned with the needs of their customers, rather than being limited by the standard choices provided by a single firm.
In contrast, in instances where customers are similar and want the standard choices that a single firm can provide (option A), or when third-party options are uniform and low quality (option B), tightly integrated products may be more desirable. In these cases, customers may value consistency and reliability over flexibility and customization.
Option C, "When compatibility with third-party products can be made seamless without integration," is not a clear indicator of when platforms become more desirable than tightly integrated products. Seamless compatibility may be possible with both platforms and tightly integrated products, depending on the specific context and market dynamics.