How do Venture Enterprises Implement the Platform Embedding Strategy in the Digital Ecosystem

Abstract

It is becoming increasingly difficult for venture enterprises to build a digital ecosystem by themselves, so there is an interesting question that how venture enterprises can use the existing digital ecosystem to build their own digital ecosystem to grow? To answer this question, we select “Yao Wang” that grew by constructing a symbiotic sub-platform within the existing digital ecosystems as an exploratory case study.The conclusions are as follows: First, venture enterprises can join the existing digital ecosystem as complementors and achieve rapid growth by implementing the platform embedding strategy which is one of entrepreneurial growth strategies. The strategy calls for venture enterprises to grow by embedding a symbiotic sub-platform within the existing digital ecosystems in a win-win way. Second, the platform embedding strategy is divided into three processes: “Embedding-Autonomy-Bridging”, and the explanation of its growth mechanism needs to integrate the dual perspectives of endogenous enterprise capability and exogenous network effect. “Embedding” is the process of stimulating network effects. By building a symbiotic sub-platform and introducing other digital ecosystems users to the existing digital platform ecosystem, venture enterprises complete the “Embedding” process. “Autonomy” is the process of upgrading the endogenous capability of venture enterprises. By depositing data resources and enhancing user stickiness with the help of digital platform ecosystem resources, venture enterprises complete the “Autonomy” process. “Bridging” is a process of expanding the symbiotic sub-platform architecture to connect multiple ecosystems, and bringing into play the synergistic effect of network effect and capability by developing multihoming businesses.The theoretical and practical implications are as follows: The process model has an important theoretical implication for understanding the entrepreneurial process in the digital platform-based ecosystem, and responds to recent call of scholars for integrating network effects and resource capability in platform embedding. This study is helpful to break venture enterprises’ cognitive shackles that the actions of venture enterprises are assumed to follow the main architecture design of the digital ecosystem. And there is more space for venture enterprises to be active in the digital ecosystems.