Platform scope and value creation in digital platforms

Abstract

Digital platform ecosystems are at the core of value creation in the digital era and a vital part of the digital strategy of firms. The generative nature of digital technologies makes it difficult for a platform sponsor to conceptualize and produce all potential product variations. Hence, co-creating value with autonomous third-party complementors is imperative. However, platform sponsors face unique uncertainties in enabling such value co-creation as often both the complementors and their value-enhancing complements are unknown ex-ante. We demonstrate how platform scope, encompassing three elements – platform technology, sponsor, and market scope, helps the platform sponsor manage uncertainties in value co-creation by attracting the right set of complementors and fostering a predictable set of complements. We discuss the implications of the scope choices for value co-creation and digital strategy of firms and highlight key areas for future research.