Using R-A theory and the optimal distinctiveness perspective to understand the strategic marketing approaches used by platform-based organizations: The cases of Facebook and Twitter in digital ecosystems

Abstract

Drawing on R-A theory and the optimal distinctiveness perspective, we explore the marketing strategies of two platform-based organizations (PBOs) that provide users the ability to build social networks/relationships with others, and marketers the opportunity to communicate with users and access user data. Using a longitudinal dataset (2010–2017) containing 360 market offerings and 39 acquisitions of Facebook and Twitter, we benchmark one PBO against another under temporal contingency. Our analysis reveals that PBOs that cater to multiple stakeholders in digital ecosystems use service innovations as part of their conformity (legitimacy argument of institutional theory) efforts and ecosystem facilitation as part of their differentiating (unique positioning and competitive distinction argument of strategic management) efforts. In addition, we find that PBOs that can better use their digital ecosystems for structural flexibility, controlled structural integrity, shared worldview, and reduced cognitive dissonance are likely to outperform those who do not. We discuss the implications of this research for PBOs, different user groups utilizing such PBOs. We conclude with a discussion on our contributions to the optimal distinctiveness perspective and R-A theory.