Platform Scope and Value Creation in Digital Platforms

25 Pages Posted: 22 Dec 2021

See all articles by Ramya K Murthy

Ramya K Murthy

Indian Institute of Management Bangalore

Anoop Madhok

York University - Schulich School of Business

Date Written: December 22, 2021

Abstract

Digital platform ecosystems are at the core of value creation in the digital era and a vital part of the digital strategy of firms. The generative nature of digital technologies makes it difficult for a platform sponsor to conceptualize and produce all potential product variations. Hence, co-creating value with autonomous third-party complementors is imperative. However, platform sponsors face unique uncertainties in enabling such value co-creation as often both the complementors and their value-enhancing complements are unknown ex-ante. We demonstrate how platform scope, encompassing three elements – platform technology, sponsor, and market scope, helps the platform sponsor manage uncertainties in value co-creation by attracting the right set of complementors and fostering a predictable set of complements. We discuss the implications of the scope choices for value co-creation and digital strategy of firms and highlight key areas for future research.

Keywords: platform scope, digital platforms, value creation, digital strategy, firm boundaries

Suggested Citation

Murthy, Ramya K and Madhok, Anoop, Platform Scope and Value Creation in Digital Platforms (December 22, 2021). IIM Bangalore Research Paper No. 653, Available at SSRN: https://ssrn.com/abstract=3991378 or http://dx.doi.org/10.2139/ssrn.3991378

Ramya K Murthy (Contact Author)

Indian Institute of Management Bangalore ( email )

Bengaluru
Karnataka
India

Anoop Madhok

York University - Schulich School of Business ( email )

470 Keele Street
Toronto, ON M3J 1P3
Canada
416-736-2100 x20578 (Phone)

HOME PAGE: http://research.schulich.yorku.ca/faculty-profile-details.jsp?id=87&tab=0

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