Managing the evolution of a platform business in network-centric ecosystems

In recent years, configuring a platform-based multisided market and its business network has become a dominant business model in information and communications technology (ICT) markets. However, the success rate of such platform-based businesses has been rather low due to continuous external forces platform companies face. These forces may be manifest in the incremental evolution of the market environment or in fast and radical changes that suddenly disrupt the logic of value creation. These disruptions, in turn, motivate platform companies to re-evaluate their business strategies and tactics. The objective of this dissertation is to reveal the structures of platform-business-network environment, the factors that force them to change, and the company level response strategies to these forces. It is posited in this dissertation that an ICT service provider can manage the evolution of its platform business and network-centric ecosystems through informed strategic actions in the midst of ever-changing environment. In the first phase, platform business structures and ecosystem interplay are illustrated. This dissertation introduces a novel model for platform ecosystem structures depicting the strategic roles and their interplay. The findings indicate that the value-network configurations of a platform ecosystem align with the level of integration in the platform company, and platform business strategies emerge through several processes. Secondly, the endogenous and exogenous forces identified in the ICT platform markets capable of triggering strategy change are compared and assessed to reveal their impact. There is evidence that both incremental evolution and transient events influence the market configurations and platform strategies: the case examples and theoretical models enhance current understanding of these forces. These forces include technological evolution, changes in the ownership of a platform company, and market consolidation, for example. Third, light is shed on how both market and non-market actions potentially adopted by a platform company improve the value creation of an ecosystem through extended scale and scope. Actions such as a change in configuration, business acquisitions, a strategy shift, and geographical extension, help increasing the number and quality of complementarities, thus rendering the platform more valuable. Finally, it is argued that integrating adjacent business structures facilitates further embeddedness of the platform in the surrounding environment, as well as the materialization of knowledge spill-over effects. Actions that foster integration include co-innovation with local customers and partners, joint development of the business model, planning common strategic objectives, and working towards common ownership.