Coevolution of Platform Dominance and Governance Strategies: Effects on Complementor Performance Outcomes

Academy of Management Discoveries, 6(3), 488-513

46 Pages Posted: 8 Jun 2020 Last revised: 2 Nov 2020

See all articles by Joost Rietveld

Joost Rietveld

UCL School of Management

Joe N. Ploog

University College London - UCL School of Management

David Nieborg

University of Toronto Scarborough

Date Written: October 30, 2020

Abstract

Multi-sided platforms such as Apple’s App Store and Valve’s Steam become increasingly dominant when more end users and complement producers join their ecosystems. Despite their importance to a platform’s overall success, however, we know little about complement producers and how they are affected by a platform’s dominance trajectory: How does a platform’s increasingly dominant market position affect performance outcomes for complementors? We explore this question by conducting a multiple case study on four market leading platform ecosystems over several years. We discover that, as a platform becomes increasingly dominant, the platform sponsor’s governance strategies shift from being largely supportive of the wider complement population to becoming more selective and geared toward end users. These changes are associated with shifts in complementor performance outcomes. Though the value created at the overall ecosystem level increases as a platform gains dominance, average demand for individual complements decreases and becomes progressively concentrated. Furthermore, we find that prices for complements decline while the costs complementors incur increase. These findings are particularly salient in the context of digital platform ecosystems, where platform sponsors can seamlessly alter their technological infrastructures and implement changes to extend and solidify their dominant positions.

Keywords: Platform Strategy, Platform Governance, Network Orchestration, Complementors, Technological Dominance, Digital Transformation

Suggested Citation

Rietveld, Joost and Ploog, Joe Niklas and Nieborg, David, Coevolution of Platform Dominance and Governance Strategies: Effects on Complementor Performance Outcomes (October 30, 2020). Academy of Management Discoveries, 6(3), 488-513, Available at SSRN: https://ssrn.com/abstract=3615719 or http://dx.doi.org/10.2139/ssrn.3615719

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

Joe Niklas Ploog

University College London - UCL School of Management ( email )

One Canada Square
London, E14 5AA
United Kingdom

David Nieborg

University of Toronto Scarborough ( email )

1265 Military Trail
Scarborough, Ontario M1C 1A4
Canada

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