Determinants of platform ecosystem health: an exploration based on grounded theory
Abstract
Whether the platform ecosystem operates well influences the survival and development of all actors. Drawing on the literature of business ecosystem health, we propose the topic of platform ecosystem health, which refers to a stable and sustainable operating status obtained through cooperation among actors that can effectively respond to turbulent changes, meet market demand, and make profit. Platform ecosystem health is complexly influenced by internal and external factors, and exploring these is the first step towards its improvement. To address this question, this study uses grounded theory to identify the main determinants and theoretically explain the ways in which these determinants influence platform ecosystem health. Specifically, we select 15 representative platform ecosystems in the mobile communication services, e-commerce, and high-tech manufacturing industries using theoretical sampling. Three encoding processes and theoretical saturation tests are then employed to analyze interview and secondary data on the health of these platform ecosystems. Based on the identified 132 concepts and nine categories, we obtain four types of determinants: dominant capabilities of the platform enterprise, cooperation potential of the complementary enterprise, products and services, and industry environment. We finally propose four propositions to illustrate the relationships between the determinants and platform ecosystem health.
Keyword : platform, platform ecosystem, health, platform ecosystem health, grounded theory, determinant
How to Cite
Chen, Y., & Sun, Y. (2021). Determinants of platform ecosystem health: an exploration based on grounded theory. Journal of Business Economics and Management, 22(5), 1142-1159. https://doi.org/10.3846/jbem.2021.15047
This work is licensed under a Creative Commons Attribution 4.0 International License.
References
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Graça, P., & Camarinha-Matos, L. M. (2017). Performance indicators for collaborative business ecosystems – Literature review and trends. Technological Forecasting and Social Change, 116, 237–255. https://doi.org/10.1016/j.techfore.2016.10.012
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Kapoor, R., & Agarwal, S. (2017). Sustaining superior performance in business ecosystems: Evidence from application software developers in the iOS and Android smartphone ecosystems. Organization Science, 28(3), 531–551. https://doi.org/10.1287/orsc.2017.1122
Kim, J. (2016). The platform business model and business ecosystem: Quality management and revenue structures. European Planning Studies, 24(12), 2113–2132. https://doi.org/10.1080/09654313.2016.1251882
Kim, K. C., Lee, S. S., Cruz, R. A. B., Enriquez, J. L. A., & Baek, J. S. (2014). Healthiness of business ecosystem and successful platform strategy: The case of Incheon International Airport. Korea Business Review, 18, 77–110.
Leonard-Barton, D. (1992). Core capabilities and core rigidities: A paradox in managing new product development. Strategic Management Journal, 13(S1), 111–125. https://doi.org/10.1002/smj.4250131009
Mageau, M. T., Costanza, R., & Ulanowicz, R. E. (1995). The development and initial testing a quantitative assessment of ecosystem health. Ecosystem Health, 1(4), 201–213.
https://www.researchgate.net/publication/279901558_The_development_and_initial_testing_a_quantitative_assessment_of_ecosystem_health
Moore, J. F. (1993). Predators and prey: A new ecology of competition. Harvard Business Review, 71(3), 75–86. https://www.researchgate.net/publication/13172133
O’Mahony, S., & Karp, R. (2020). From proprietary to collective governance: How do platform participation strategies evolve? Strategic Management Journal, 1–33. https://doi.org/10.1002/smj.3150
Pan, J., & Lin, J. (2019). Construction of network entrepreneurial platform leadership characteristics model: Based on the grounded theory. Journal of Business Economics and Management, 20(5), 958–978. https://doi.org/10.3846/jbem.2019.10618
Panico, C., & Cennamo, C. (2020). User preferences and strategic interactions in platform ecosystems. Strategic Management Journal, 1–23. https://doi.org/10.1002/smj.3149
Parker, G., & Van Alstyne, M. (2018). Innovation, openness, and platform control. Management Science, 64(7), 3015–3032. https://doi.org/10.1287/mnsc.2017.2757
Pellizzoni, E., Trabucchi, D., & Buganza, T. (2019). Platform strategies: How the position in the network drives success. Technology Analysis & Strategic Management, 31(5), 579–592. https://doi.org/10.1080/09537325.2018.1524865
Rieger, K. L. (2019). Discriminating among grounded theory approaches. Nursing Inquiry, 26(1), 1–12. https://doi.org/10.1111/nin.12261
Rietveld, J., Ploog, J. N., & Nieborg, D. B. (2020). Coevolution of platform dominance and governance strategies: Effects on complementor performance outcomes. Academy of Management Discoveries, 6(3), 488–513. https://doi.org/10.5465/amd.2019.0064
Rietveld, J., Schilling, M. A., & Bellavitis, C. (2019). Platform strategy: Managing ecosystem value through selective promotion of complements. Organization Science, 30(6), 1232–1251. https://doi.org/10.1287/orsc.2019.1290
Scaringella, L., & Radziwon, A. (2018). Innovation, entrepreneurial, knowledge, and business ecosystems: Old wine in new bottles?. Technological Forecasting and Social Change, 136, 59–87. https://doi.org/10.1016/j.techfore.2017.09.023
Song, P., Xue, L., Rai, A., & Zhang, C. (2018). The ecosystem of software platform: A study of asymmetric cross-side network effects and platform governance. MIS Quarterly, 42(1), 121–142. https://doi.org/10.25300/misq/2018/13737
Täuscher, K., & Laudien, S. M. (2018). Understanding platform business models: A mixed methods study of marketplaces. European Management Journal, 36(3), 319–329. https://doi.org/10.1016/j.emj.2017.06.005
Teece, D. J., Pisano, G., & Shuen, A. (1997). Dynamic capabilities and strategic management. Strategic Management Journal, 18(7), 509-533. https://doi.org/10.1002/(SICI)1097-0266(199708)18:7<509::AID-SMJ882>3.0.CO;2-Z
Teece, D. J. (2018). Profiting from innovation in the digital economy: Enabling technologies, standards, and licensing models in the wireless world. Research Policy, 47(8), 1367–1387. https://doi.org/10.1016/j.respol.2017.01.015
Tiwana, A. (2013). Platform ecosystems: Aligning architecture, governance, and strategy (1st ed). Morgan Kaufmann.
Walton, N. (2017). The Internet as a technology-based ecosystem: A new approach to the analysis of business, markets and industries. Palgrave Macmillan. https://doi.org/10.1057/978-1-137-60077-6
West, J., & Wood, D. (2014). Evolving an open ecosystem: The rise and fall of the Symbian platform. In Advances in strategic management: Vol. 30. Collaboration and competition in business ecosystems (pp. 27–67). Emerald Group Publishing Limited. https://doi.org/10.1108/S0742-3322(2013)0000030005
Ågård, A. S., Egerod, I., Tønnesen, E., & Lomborg, K. (2015). From spouse to caregiver and back: A grounded theory study of post-intensive care unit spousal caregiving. Journal of Advanced Nursing, 71(8), 1892–1903. https://doi.org/10.1111/jan.12657
Cennamo, C., & Santalo, J. (2013). Platform competition: Strategic trade-offs in platform markets. Strategic Management Journal, 34(11), 1331–1350. https://doi.org/10.1002/smj.2066
Corbin, J. M., & Strauss, A. L. (1990). Grounded theory research: Procedures, canons, and evaluative criteria. Qualitative Sociology, 13(1), 3–21. https://doi.org/10.1007/BF00988593
Corbin, J. M., & Strauss, A. L. (2014). Basics of qualitative research: Techniques and procedures for developing grounded theory (3rd ed.). Sage Publications. https://www.amazon.com/Basics-QualitativeResearch-Techniques-Procedures/dp/141290644X
Cusumano, M. A., & Gawer, A. (2002). The elements of platform leadership. MIT Sloan Management Review, 43(3), 51–58. http://epubs.surrey.ac.uk/id/eprint/811215
den Hartigh, E., Tol, M., & Visscher, W. (2006, October). The health measurement of a business ecosystem. Paper presented at the ECCON 2006 Annual Meeting. https://www.academia.edu/11105126/The_Health_Measurement_of_a_Business_Ecosystem
Gawer, A., & Cusumano, M. A. (2002). Platform leadership: How Intel, Microsoft, and Cisco drive industry innovation. Harvard Business School Press. https://www.amazon.com/Platform-LeadershipMicrosoft-Industry-Innovation/dp/1578515149
Gawer, A., & Cusumano, M. A. (2014). Industry platforms and ecosystem innovation. Journal of Product Innovation Management, 31(3), 417–433. https://doi.org/10.1111/jpim.12105
Gawer, A., & Henderson, R. (2007). Platform owner entry and innovation in complementary markets: Evidence from Intel. Journal of Economics & Management Strategy, 16(1), 1–34. https://doi.org/10.1111/j.1530-9134.2007.00130.x
Graça, P., & Camarinha-Matos, L. M. (2017). Performance indicators for collaborative business ecosystems – Literature review and trends. Technological Forecasting and Social Change, 116, 237–255. https://doi.org/10.1016/j.techfore.2016.10.012
Glaser, B. G., & Strauss, A. L. (1967). The discovery of grounded theory. Aldine de Gruyter. http://www.sxf.uevora.pt/wp-content/uploads/2013/03/Glaser_1967.pdf
Helfat, C. E., & Raubitschek, R. S. (2018). Dynamic and integrative capabilities for profiting from innovation in digital platform-based ecosystems. Research Policy, 47(8), 1391–1399. https://doi.org/10.1016/j.respol.2018.01.019
Hannah, D. P., & Eisenhardt, K. M. (2018). How firms navigate cooperation and competition in nascent ecosystems. Strategic Management Journal, 39(12), 3163–3192. https://doi.org/10.1002/smj.2750
Iansiti, M., & Levien, R. (2002). The new operational dynamics of business ecosystems: Implications for policy, operations and technology strategy (Working Paper, No. 03-030). Harvard Business School. https://www.hbs.edu/faculty/Pages/item.aspx?num=13381
Iansiti, M., & Levien, R. (2004a). Strategy as ecology. Harvard Business Review, 82(3), 68–81. https://hbr.org/2004/03/strategy-as-ecology
Iansiti, M., & Levien, R. (2004b). The keystone advantage: What the new dynamics of business ecosystems mean for strategy, innovation, and sustainability. Harvard Business Press. https://www.hbs.edu/faculty/Pages/item.aspx?num=16920
Inoue, Y. (2020). The effects of using existing brands in platform ecosystems. Academy of Management Proceedings, 2020(1), 19240. https://doi.org/10.5465/AMBPP.2020.19240abstract
Jacobides, M. G., Cennamo, C., & Gawer, A. (2018). Towards a theory of ecosystems. Strategic Management Journal, 39(8), 2255–2276. https://doi.org/10.1002/smj.2904
Jansen, S., Brinkkemper, S., & Finkelstein, A. (2009). Business network management as a survival strategy: A tale of two software ecosystems. In Proceedings of the First Workshop on Software Ecosystems (pp. 34–48). CEUR-WS. http://ceur-ws.org/Vol-505/iwseco09-5JansenBrinkkemperFinkelstein.pdf
Jansen, S. (2014). Measuring the health of open source software ecosystems: Beyond the scope of project health. Information & Software Technology, 56(11), 1508–1519. https://doi.org/10.1016/j.infsof.2014.04.006
Kapoor, R., & Agarwal, S. (2017). Sustaining superior performance in business ecosystems: Evidence from application software developers in the iOS and Android smartphone ecosystems. Organization Science, 28(3), 531–551. https://doi.org/10.1287/orsc.2017.1122
Kim, J. (2016). The platform business model and business ecosystem: Quality management and revenue structures. European Planning Studies, 24(12), 2113–2132. https://doi.org/10.1080/09654313.2016.1251882
Kim, K. C., Lee, S. S., Cruz, R. A. B., Enriquez, J. L. A., & Baek, J. S. (2014). Healthiness of business ecosystem and successful platform strategy: The case of Incheon International Airport. Korea Business Review, 18, 77–110.
Leonard-Barton, D. (1992). Core capabilities and core rigidities: A paradox in managing new product development. Strategic Management Journal, 13(S1), 111–125. https://doi.org/10.1002/smj.4250131009
Mageau, M. T., Costanza, R., & Ulanowicz, R. E. (1995). The development and initial testing a quantitative assessment of ecosystem health. Ecosystem Health, 1(4), 201–213.
https://www.researchgate.net/publication/279901558_The_development_and_initial_testing_a_quantitative_assessment_of_ecosystem_health
Moore, J. F. (1993). Predators and prey: A new ecology of competition. Harvard Business Review, 71(3), 75–86. https://www.researchgate.net/publication/13172133
O’Mahony, S., & Karp, R. (2020). From proprietary to collective governance: How do platform participation strategies evolve? Strategic Management Journal, 1–33. https://doi.org/10.1002/smj.3150
Pan, J., & Lin, J. (2019). Construction of network entrepreneurial platform leadership characteristics model: Based on the grounded theory. Journal of Business Economics and Management, 20(5), 958–978. https://doi.org/10.3846/jbem.2019.10618
Panico, C., & Cennamo, C. (2020). User preferences and strategic interactions in platform ecosystems. Strategic Management Journal, 1–23. https://doi.org/10.1002/smj.3149
Parker, G., & Van Alstyne, M. (2018). Innovation, openness, and platform control. Management Science, 64(7), 3015–3032. https://doi.org/10.1287/mnsc.2017.2757
Pellizzoni, E., Trabucchi, D., & Buganza, T. (2019). Platform strategies: How the position in the network drives success. Technology Analysis & Strategic Management, 31(5), 579–592. https://doi.org/10.1080/09537325.2018.1524865
Rieger, K. L. (2019). Discriminating among grounded theory approaches. Nursing Inquiry, 26(1), 1–12. https://doi.org/10.1111/nin.12261
Rietveld, J., Ploog, J. N., & Nieborg, D. B. (2020). Coevolution of platform dominance and governance strategies: Effects on complementor performance outcomes. Academy of Management Discoveries, 6(3), 488–513. https://doi.org/10.5465/amd.2019.0064
Rietveld, J., Schilling, M. A., & Bellavitis, C. (2019). Platform strategy: Managing ecosystem value through selective promotion of complements. Organization Science, 30(6), 1232–1251. https://doi.org/10.1287/orsc.2019.1290
Scaringella, L., & Radziwon, A. (2018). Innovation, entrepreneurial, knowledge, and business ecosystems: Old wine in new bottles?. Technological Forecasting and Social Change, 136, 59–87. https://doi.org/10.1016/j.techfore.2017.09.023
Song, P., Xue, L., Rai, A., & Zhang, C. (2018). The ecosystem of software platform: A study of asymmetric cross-side network effects and platform governance. MIS Quarterly, 42(1), 121–142. https://doi.org/10.25300/misq/2018/13737
Täuscher, K., & Laudien, S. M. (2018). Understanding platform business models: A mixed methods study of marketplaces. European Management Journal, 36(3), 319–329. https://doi.org/10.1016/j.emj.2017.06.005
Teece, D. J., Pisano, G., & Shuen, A. (1997). Dynamic capabilities and strategic management. Strategic Management Journal, 18(7), 509-533. https://doi.org/10.1002/(SICI)1097-0266(199708)18:7<509::AID-SMJ882>3.0.CO;2-Z
Teece, D. J. (2018). Profiting from innovation in the digital economy: Enabling technologies, standards, and licensing models in the wireless world. Research Policy, 47(8), 1367–1387. https://doi.org/10.1016/j.respol.2017.01.015
Tiwana, A. (2013). Platform ecosystems: Aligning architecture, governance, and strategy (1st ed). Morgan Kaufmann.
Walton, N. (2017). The Internet as a technology-based ecosystem: A new approach to the analysis of business, markets and industries. Palgrave Macmillan. https://doi.org/10.1057/978-1-137-60077-6
West, J., & Wood, D. (2014). Evolving an open ecosystem: The rise and fall of the Symbian platform. In Advances in strategic management: Vol. 30. Collaboration and competition in business ecosystems (pp. 27–67). Emerald Group Publishing Limited. https://doi.org/10.1108/S0742-3322(2013)0000030005