The Dynamic of Platform Positioning Strategies in a Nascent Ecosystem and The Role of Managerial Cognition

Established firms increasingly engage in the development of a new digital platform to capture new growth opportunities presented by digital technologies. Prior research on platform strategy has generally examined the process of platform creation in the context of established ecosystems. However, less is known about platform strategy development in nascent ecosystems. Nascent ecosystems are interdependent networks of firms, in the early stage of formation, characterized by a lack of blueprints that define the value propositions and the associated structure of governance and interaction. This characteristic presents strategic challenges for managers since they must determine the platform positioning (i.e. the platform’s technical design and platform scope) under extreme ambiguity and uncertainty. This thesis aims to understand the dynamics of platform positioning strategies of an established firm in a nascent ecosystem by answering two interrelated questions: How does an established firm develop platform positioning strategies for a nascent ecosystem? and Why the positioning strategies shift over time? These questions are addressed by investigating the journey of TELECO, a global telecommunication producer, in developing a new digital platform in the nascent Internet of Things ecosystems over a period of 9 years. I introduce an alternative pathway of platform positioning that consists of three distinct platform positioning strategies: (1) Analogous positioning, (2) Expansionary Positioning, and (3) Downward positioning. The first strategy entails positioning the platform analogous to the firm’s position in its legacy, non-platform ecosystem. This strategy is shaped by an Evolutionary strategic frame which entails managers’ belief on the continuity between the legacy and the nascent ecosystem. The second positioning strategy involves expanding the platform’s position to maximizes potential value creation and capture. I find that this strategy is shaped by a Proactive strategic frame which entails managers’ belief on the transformative nature of the nascent ecosystem and vision to shape the ecosystem’s evolution. The last positioning strategy entails calibrating the platform’s position to the point that minimizes contestations and better corresponds with the firm’s capabilities limitations. This strategy is shaped by an Adaptive strategic frame which entails managers’ belief on the need to adapt to the changing ecosystem dynamic and adjust their prior assumptions. Overall, this thesis offers rich theoretical insights into the research of platform strategy in nascent ecosystems by explicating the interplay of platform strategies, managerial cognition, and ecosystem dynamics.