Competing in the Networked Economy: The Development, Sustenance and Strategic Implications of Digital Platforms

Abstract

The proliferation of the Internet has enabled the development of digital platforms, i.e., digital commercial networks of discrete entities (such as suppliers, intermediaries, and customers) that are connected through mutual dependencies and/or formal contracting. Information systems (IS) researchers have advocated digital platforms as a new and promising research field. This thesis presents three essays to address the underexplored issues of digital platform management. More specifically, this thesis investigates a range of strategic implications, including how digital platforms may be enacted and sustained and how digital platform hosts may compete strategically using different IS capabilities. The first essay considers the case of an online peer-to-peer (P2P) lending platform to reveal how digital platforms may be developed. The study reveals that the development process of an online P2P lending platform can unfold in a specific sequence across three stages, and the development of a particular side of the platform should be emphasised in each stage, i.e., partners, followed by lenders, and then borrowers. Each stage is also distinctive in terms of its strategies and platform configuration outcomes. The process model contributes to an in-depth view of how digital platforms should be established and nurtured to complement existing studies in the growing research area of digital platforms, especially considering the increasing number of digital start-ups that have adopted platform-based business models. In addition, this study suggests strategies that can facilitate the development of platforms in various stages, which can potentially serve as a foundation for formulating guidelines for managers of P2P lending and other digital platforms, allowing them to optimise the development of their platforms and extend the benefits of their services to a broader base of customers. The second essay discusses the issue of sustenance in the context of digital platforms based on a case study of a massively multiplayer online game (MMOG). Adopting a theoretical lens of product lifecycle theories, a four-stage lifecycle model of digital platforms in vi conjunction with the technology–organisation–environment (TOE) framework has been proposed, and the theoretical implications of product lifecycle theories are presented. Furthermore, the emphasis on different dimensions and strategies is discussed for each stage. In turn, the model can facilitate the hosting of MMOGs and other types of digital platforms to manage the overall platform lifecycle and thus sustain the platform. The third essay reports a comprehensive study of the role of IS in the achievement of second-mover advantages (SMA) in the context of digital disruption (DD) based on a case study of an accommodation-sharing platform. The fact that early-mover advantages are shortlived in the context of DD creates opportunities for second-movers, who can avoid the uncertainty in a competitive environment and lower costs by imitating, and often improving upon, the business models of early-movers. The benefits of SMA may be facilitated by IS, but its precise role in facilitating SMA is unknown, especially in the context of DD. Based on the case study findings, a three-stage process model that may explain the process of IS-enabled SMA has been proposed. These stages are marked by the employment of distinct strategies and IS capabilities, which, in turn, leads to several strategic implications for digital platforms. The proposed model can potentially serve as a foundation for formulating guidelines for digital platform hosts to enjoy the benefits of IS-enabled SMA and thus compete strategically. Overall, the three essays are targeted at contributing to the research on development, sustenance, and strategic implications in the context of digital platforms.