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Designing and orchestrating ecosystem-based business models: processual study of value maximization in the sharing economy

Student thesis: Doctoral Thesis

A majority of the well-designed multi-sided platforms create far more value for their stakeholders than they can capture for themselves, which often contributes to their short lifespans. In multi-stakeholder ecosystems, capturing value tends to be more difficult than creating it ( Bock & George, 2018 ). Therefore, to understand how to implement, innovate, and grow multi-sided platforms, it is imperative to comprehend how these ecosystem-based business models create, and appropriate value over time. While traditional companies “create value by controlling a linear series of activities, [adopting] the classic value-chain model” ( Van Alstyne, Parker & Choudary , 2016, p.5), platforms’ competitive advantage revolves around the ability to leverage and orchestrate resources of their members, rather than aggregating them internally. Despite this fundamental difference, scholars continue conceptualizing multi-sided platforms by using the popular business model frameworks and tools. Many of these tools are suitable for mapping out challenges faced by a traditional organization (i.e., firm-centric view); however, they are of limited use in examining ecosystem-based business models (e.g., platforms, innovation networks, servitization ecosystems). These business models coevolve within the ecosystems in which they are embedded (Muzellec, Ronteau, & Lambkin, 2015). While these static tools could shed more light on w hat ecosystem-based business models are (i.e., structure, taxonomy, archetypes), they cannot advance our comprehension of how they work, which is still lacking in both academia and practice alike.

By building on the empirical case study of HeadBox; the first B2B digital platform that disrupted and is currently reshaping the UK’s event industry, stakeholder theory, and broader ecosystem and business model innovation literature, this thesis offers an alternative conceptualization of these ecosystem-based business models in which, emergence and underlying value mechanisms - rather than static structures and building blocks - are central to our understanding of them. This conceptualization not only allows for a more dynamic study of multi-sided platforms in particular but also opens new avenues for future research of multi-stakeholder business ecosystems in general.

In this thesis, I argue that a platform-based business model is an ongoing
coevolutionary process, influencing and influenced by changes in structures, relationships, and interactions among stakeholders within the broader system (i.e., value network, ecosystem), orchestrated by platform owner (i.e., central actor, focal firm, central hub) to maximize the value creation and capture opportunities for itself and all other stakeholders within the ecosystem
. Thus, a particular business model archetype (i.e., pattern or structure) is a direct manifestation of the underlying value-driving mechanisms that by exercising (or not exercising) their causal powers give it its perceived temporary ‘structure’ (i.e., archetypes). Besides putting forward a processual, and thus a more dynamic view of multi-sided platforms, and extending the emerging debate on sharing economy into a B2B context, the thesis aims to make several theoretical contributions to stakeholder theory (Freeman, 1984, 2010; Freeman, Harrison, Wicks, Parmar & De Colle, 2010; Freeman., Harrison & Zyglidopoulos, 2018; Harrison, Bosse, & Phillips, 2007) and value networks literature ( Laamanen, Rong & Van de Ven, 2018; Perks, Kowalkowski, Witell & Gustafsson, 2017) . First, I challenge the dominant view that the platform owner has only limited control over the platform’s emergence. Findings from the longitudinal case indicate that the platform owner is not only able to, but also must actively orchestrate these networks (e.g., interactions, information flows) to continuously attract new stakeholders, keep the existing ones (i.e., increasing platform’s s tickiness ) and benefit from such activities (i.e., expanding platform’s p rofitability ). In other words, it is the role of the platform owner to maintain and continually iterate the strategic direction in which the platform is heading. Second, along with uncovering core phases through which multi-sided platforms coevolve, I put forward eight value-driving mechanisms that enable the platform owner to effectively orchestrate its diverse multi-stakeholder ecosystem to maximize its value over time for both stakeholders and itself. Arguably, the platform’s long term success can be determined by examining how the platform owner orchestrates these mechanisms throughout all platform’s coevolutionary phases. Studying the processes of platform coevolution allowed me to not only further conceptualize the platforms underlying value-driving mechanisms, but on their basis build the necessary implementation and orchestration framework: Platform Stickiness-Profitability Compass, that forms the practical contribution of this thesis. Given the phenomenon-driven (PDR) nature of this study, this framework was ‘stress-tested’ in the field to assess its relevance and usability for practicing managers as a tool for designing, orchestrating and evaluating platforms and other ecosystem-based business models. These tests have not only riveted my attention to the strengths and potential application of this framework but also uncovered the shortcomings that present avenues for future research. The proposed framework provides a robust yet flexible tool that enables managers to innovate and grow their multi-sided platforms (or other multi-stakeholder ecosystems such as innovation networks) by prioritizing their dynamic mechanisms over static building blocks. This allows managers to keep these ecosystem-based business models ‘evolvable’, which is a prerequisite for sustaining them over time ( Tilson, Sørensen & Lyytinen, 2012; Tiwana, 2014).
Original languageEnglish
Awarding Institution
Supervisors/Advisors
Award dateSep 2019

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