Platform Strategy: Managing Ecosystem Value Through Selective Promotion of Complements

Joost Rietveld (), Melissa A. Schilling () and Cristiano Bellavitis ()
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Joost Rietveld: UCL School of Management, University College London, London E14 5AA, United Kingdom
Melissa A. Schilling: Stern School of Business, New York University, New York, New York 10012
Cristiano Bellavitis: Auckland Business School, Auckland University, Auckland 1010, New Zealand

Organization Science, 2019, vol. 30, issue 6, 1232-1251

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 trade-offs 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 (search for similar items in EconPapers)
Date: 2019
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Citations: View citations in EconPapers (70)

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