Now showing 1 - 7 of 7
  • Publication
    Generativity and Profitability on B2B Innovation Platforms: A Simulation-based Theory Development
    ( 2024-06)
    Kazem Haki
    ;
    Hüseyi̇n Tanriverdi̇
    ;
    Dorsa Safaei
    ;
    ; ;
    Firms generate innovations to profit from market opportunities, which are newly identified customer needs not yet being met in the market. The rising complexity of market opportunities requires collaboration among multiple partner firms. However, this multipartner collaboration increases transaction and production costs when generating innovations. To address these challenges, incumbents build B2B innovation platforms with mechanisms to reduce partners’ transaction and production costs. We do not yet know if and when partners would choose to use the incumbent’s traditional service innovation model or the B2B innovation platform and how this choice would affect the generativity and profitability of innovations for the incumbent and the partners. We used agent-based modeling and simulation to develop a theory to address these questions. We found that the complexity of market opportunities interacts with the B2B innovation platform’s transaction and production mechanisms to jointly affect whether partners use the platform and when the incumbent and partners achieve generativity and profitability. When the complexity of market opportunities is low, partners use the traditional service innovation model. As complexity increases to medium or high levels, partners begin to use the B2B innovation platform mechanisms to address the transaction and production challenges presented by the complexity of market opportunities. However, there are limits to how much the platform mechanisms can address these challenges. The complexity of market opportunities inhibits the emergence of network effects on B2B innovation platforms and limits the generativity and profitability of platform partners. There are diminishing benefits of investing in the platform’s transaction and production mechanisms, and complexity affects whether the platform owner or the partners profit from innovations generated on the platform.
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    Scopus© Citations 1
  • Publication
    PLATFORM OVER MARKET – WHEN IS JOINING A PLATFORM BENEFICIAL?
    Firms struggle to meet dynamically changing customers’ needs. One challenge is to navigate a complex search space to find resources needed for innovations that meet customers’ needs. Another challenge is to acquire the resources at lower costs than revenue opportunities to yield profitability. Digital platforms promise to address these challenges better than the market by providing search matching capabilities and modular, reusable resources. We examine whether platforms improve innovation performance and profitability of firms better than the market, as assumed. Using agent-based modeling and simulation, we find that firms perform better in the market when environmental complexity is low. As environmental complexity increases, firms start to perform better on the platform than in the market, specifically when the platform owner remarkably invests in search matching and modularity capabilities. The study advances our understanding of the environmental conditions under which platforms could be superior or inferior to the market.
  • Publication
    Investigating B2B Innovation Platforms from a Complexity Perspective: A Simulation-based Approach
    (Universität St. Gallen, 2023-02-20)
    B2B innovation platforms serve as increasingly popular venues for value creation of firms. Such innovation platforms facilitate the generation of innovation between multiple partners in the form of multi-partner innovation (MPI). MPI is generally a complex process that poses several challenges. Through their offered leverages, B2B innovation platforms are assumed to tame these complexity challenges and foster MPI outcomes. Thus, B2B innovation platforms create a novel and promising organizing logic in the context of MPI. The circumstances under which B2B platform leverages tame complexity challenges posed by MPI processes in business ecosystems have not been investigated, however. Thus, this dissertation aims to examine the roles of B2B platform leverages in taming complexity challenges and to specify whether and how platforms truly are a promising organizing logic. To this end, complexity science is applied as a theoretical foundation to understand how complexity emerges and why it causes challenges in business ecosystems. Subsequently, agent-based modeling is employed as a research method to account for the interrelations of the central constructs, model the resulting complexity, and conduct simulation experiments to derive new theoretical insights. The developed simulation model and the interpretation of its results is iteratively refined over the dissertations constituent papers. The resulting contributions constitute an extendible agent-based model of a B2B innovation platform within a complex business ecosystem as well as several theoretical insights. For research, the derived findings indicate that the ecosystem-level complexity of a business ecosystem represents a major contingency for B2B platform leverages ability to tame complexity challenges. MPI complexity triggers distinct regions of complexity in the business ecosystem, and B2B platform leverages are found to only tame complexity challenges in the region of emergent complexity. For practitioners, the results imply that B2B innovation platforms are not uniformly disruptive to all industry contexts. The ecosystem-level complexity in a given business ecosystem should be accounted for, as it may determine when investing into a B2B innovation platform and adopting a platform organizing logic is particularly promising.