Platform Strategy: Managing Ecosystem Value Through Selective Promotion of Complements

Organization Science (Forthcoming)

42 Pages Posted: 30 Oct 2017 Last revised: 15 Jan 2019

See all articles by Joost Rietveld

Joost Rietveld

UCL School of Management

Melissa A. Schilling

New York University (NYU) - Department of Management and Organizational Behavior

Cristiano Bellavitis

Auckland Business School, Management and International Business

Date Written: January 14, 2019

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.

Keywords: Platforms, ecosystems, complements, value creation, value capture; endorsements

Suggested Citation

Rietveld, Joost and Schilling, Melissa A. and Bellavitis, Cristiano, Platform Strategy: Managing Ecosystem Value Through Selective Promotion of Complements (January 14, 2019). Organization Science (Forthcoming). Available at SSRN: https://ssrn.com/abstract=3061424 or http://dx.doi.org/10.2139/ssrn.3061424

Joost Rietveld (Contact Author)

UCL School of Management ( email )

Level 38, One Canada Square, Canary Wharf
London, E14 5AA
United Kingdom

HOME PAGE: http://www.strategyguide.nl

Melissa A. Schilling

New York University (NYU) - Department of Management and Organizational Behavior ( email )

40 West Fourth Street
New York, NY 10012
United States
212-998-0249 (Phone)
212-995-4235 (Fax)

Cristiano Bellavitis

Auckland Business School, Management and International Business ( email )

12 grafton rd
Auckland
Auckland, Auckland 0000
New Zealand

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