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Platform Strategy: Managing Ecosystem Value Through Selective Promotion of Complements

Rietveld, G; Schilling, M; Bellavitis, C; (2019) Platform Strategy: Managing Ecosystem Value Through Selective Promotion of Complements. Organization Science , 30 (6) pp. 1125-1393. 10.1287/orsc.2019.1290. Green open access

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Abstract

Platform sponsors typically have both incentive and opportunity to manage the overall value of their ecosystems. Through selective promotion, a platform sponsor can reward successful complements, bring attention to underappreciated complements, and influence the consumer’s perception of the ecosystem’s depth and breadth. It can use promotion to induce and reward loyalty of powerful complement producers, and it can time such promotion to both boost sales during slow periods and reduce competitive interactions between complements. We develop arguments about whether and when a platform sponsor will selectively promote individual complements, and test these arguments on data from the console video game industry in the United Kingdom. We find that platform sponsors do not simply promote “best in class” complements; they strategically invest in complements in ways that address complex tradeoffs in ecosystem value. Our arguments and results build significant new theory that helps us understand how a platform sponsor orchestrates value creation in the overall ecosystem.

Type: Article
Title: Platform Strategy: Managing Ecosystem Value Through Selective Promotion of Complements
Open access status: An open access version is available from UCL Discovery
DOI: 10.1287/orsc.2019.1290
Publisher version: https://doi.org/10.1287/orsc.2019.1290
Language: English
Additional information: This work is licensed under a Creative Commons Attribution-NonCommercial 4.0 International License. You are free to download this work and share with others for any purpose, except commercially, and you must attribute this work as “Organization Science. Copyright © 2019 The Author(s). https://doi.org/10.1287/orsc.2019.1290, used under a Creative Commons Attribution License: https://creativecommons.org/licenses/by-nc/4.0/
Keywords: Platforms; ecosystems; complements; value creation; value capture; endorsements.
UCL classification: UCL
UCL > Provost and Vice Provost Offices > UCL BEAMS
UCL > Provost and Vice Provost Offices > UCL BEAMS > Faculty of Engineering Science
UCL > Provost and Vice Provost Offices > UCL BEAMS > Faculty of Engineering Science > UCL School of Management
URI: https://discovery.ucl.ac.uk/id/eprint/10070730
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