Complementary Innovation in Platform-Centric Ecosystems. An Entegrated View

Master's Thesis from the year 2015 in the subject Business economics - Business Management, Corporate Governance, grade: 1,3, University of Mannheim, language: English, abstract: Managers in strategy and organization for innovation are increasingly confronted with the challenge to compete on the basis of complex technology platforms. Prominent examples, such as Microsoft Windows (operating systems), Google (Internet search engines), Facebook (online social networks), Sony PlayStation (video game consoles), Visa (payment cards), Wal-Mart (retail), Tesla Motors (electric cars) or Life Technologies (genome sequencing), demonstrate that platforms are pervasive in many industries. In fact, platforms represent one of three configuration models through which firms innovate and generate value. Thus, platforms are both a mechanism for value creation through innovation and value capture through appropriation. Their economic importance is substantial: in terms of market value, 60 of the 100 largest companies worldwide earn more than half of their income in platform markets. The emergence of platforms reflects the growing interdependency between products and services and the increasing dispersion of innovation activities among many different actors, especially in rapidly evolving high-tech industries. It has been widely acknowledged in management theory and practice that in order to successfully commercialize innovations and create value for end users, platforms have to be embedded in an interrelated array of organizations, including suppliers, complementors, customers, competitors and institutions. Thereby, platforms constitute the foundation upon which a vast and diverse web of firms, commonly defined as a 'business ecosystem', develop and provide complementary products and services. While the question of how platform owners can stimulate R&D activities by complementors has been tackled in the academic literature and evolved to a promising research field, a coherent concept of the managerial levers is still missing. This motivates the following research question: 'What firm-level and industry-level determinants of platform-centric ecosystems encourage or impede complementary innovation by third-party organizations?' Accordingly, the main objective of this thesis is to conceptualize an integrated view of the defining elements of platform ecosystems and their implications for the innovation orientation of complementors. In addition, this thesis aims to test and build on the proposed theoretical framework empirically by investigating the high-tech industry platform ecosystems of Amazon Web Services (AWS) and Advanced RISC Machines (ARM).