NEW PRODUCT DEVELOPMENT AND BUSINESS ECOSYSTEMS 1
Analyse Gawer’s notion of technological platforms and critically asses to what extent it captures the dynamic of innovation in the current technological era.
Introduction
The essay consists of detail information about technological platforms that capture innovation and competition in the current technological era. Advance management research consists of an integrative approach that leads to two theoretical perspectives on technological platforms. The economic perspective and engineering design perspectives are mentioned in detail. The economic perspective tends to help in understanding the competition platform, while the engineering perspective is about the innovative platform. These are conceptualized while it even involves a greater focus on meta-organizations with several arguments and discussion about competition and innovation platform. In evolving organizations, these platforms are useful with coordinated constitutive agents for competition and innovation in business, creating a value that focuses on harnessing scope of demand and entail a modular architectural core to support classification system and technology platform that has several varieties of forms of organization. The importance of economic platforms and technological platform with the knowledge of competition and innovation are represented in the essay.
Technological platforms
The economic perspective includes a multi-sided market which is even known as a multi-sided platform (Boudreau & Hagiu 2009). This is a special kind of platform that has played an important role in order to facilitate the exchange of information between consumers. These emphasize the nature of network effects on two sides of the market. Here, the market involves two groups specifically agents that largely interact with the help of a platform. In this perspective, the pricing and other strategies are important and affect indirectly between the two sides. With the help of a strong network, there drives competition among the platforms which results in a “winner-take-all” condition (Gawer & Phillips 2013). The direct network and the indirect network are the two kinds of network effects that are observed in this perspective. The direct network effect is even called as the same side network that means, the technology benefits the dependency of the user on other users while using the technology. For example network of Skype users and telephone network are direct network effects. Indirect network effect arises in both the directions which are even called a cross-group network. Platform competition is adapted with the multiple consumer constituencies that are basically lighted up with the help of network effects. The difference in pricing and adoption of a business model is very well focused on the economic approach. For example the ICT and the payment industry. In the economic perspective, the platforms create value and thereby the consumers can connect and transact with each other and thereby it affects the pricing system (Baldwin & Woodard 2009).
The engineering perspective leads to technological architectures. An innovation approach reflects in engineering design platform. An innovation platform is a concept of the platform that meets the needs of consumers while adding, removing features or by substituting the features from the platform (Suarez & Kirtley 2012). There is a stream of products that can be well presented in the form of the platform with different interfaces and technological aspects with the range of products and interfaces that form a subsystem asset in order to share a specific set of product (Eisenmann, Parker & Van Alstyne 2011). Then there are manufacturing platforms that are shared across the supply chain with the increased use of a set of products to be supplied across the firms. In an innovation eco-system, a larger network of firms is structured and linked with the help of buyer-supplier relationship. These are even termed as ecologies of economic standards and complex innovation. Ascertaining the building block, these platforms provide a major function of a technological system that is well organized and intends to develop several complementary products and services. With the help of platform design, there is a common element that sets the organizational contexts in detail while highlighting the structural commonality. The unique platforms are particularly focused on technological architecture and the core components are observed with variable and constituents. Facilitating innovation is the major good thing that modular systems work on with a central tenet of modular product architecture. It is thus important to know that the modular system helps to focus on platforms and manage complex decisions while interacting with the standardized interfaces.
Platform competition and innovation
There are a set of attributes for each kind of platforms such as internal, industry or supply-chain platform. The set of attributes are interfaces, organizational form or governance. The patterns of platform innovation and competition include the technological platform that has a high degree and the set of access capabilities. Thereby there is a kind of fluidity that is represented with an evolutionary pathway, for example, the evolution of computer mainframes (Adner & Kapoor 2010). The three decades evolution of computer is the case where the personal computers were structured while engaging a radical change in the design and technological effect. There were different models that were represented each and every time with the modular platforms that introduced the future of IBM with different product models (Zirpoli & Becker 2011). The technical possibilities were analyzed that introduced the poached and the plug compatible platform. The peripherals include terminals, memory devices, disk drives, and printers lately in the 1980s. IBM PC was introduced with the help of innovation and competition platform. Thereby the supply-chain was then evolved with industry platforms with Microsoft and Intel as the seizing leadership. There was a faster interconnection between the open interfaces as observed in the Intel and Microsoft platform. There was an establishment of continuous support that consists of competition and innovation with an organization continuum strategy. Thereby there is a connection between innovation and competition and an organization can unpack these two platforms for growth and development of an organization (Gulati, Puranam & Tushman 2012).
Design decisions improve the technological interface which is expected and can affect positively in collaboration with the platform design and incentives for increased competitiveness. There is an increase in competition when a platform moves to the supply chain from internal platforms. There is an increase in completion and thereby the agents of the platforms compete with an increase in the number of sets with managerial hierarchy and supply chain (Boudreau 2012). There is an appropriate contract that is maintained by an organization while focusing on complementary and contractual safeguards. As such the competitive behavior of platforms is higher on industry platform considering the modularized enablers and performers. There is an increase in the competition by the competition platform owners in several industry ecosystems. There is a consequence that determines the increase in competition and innovation. For example, a platform interface is consequently open, there is an increase in consumers and the agents get attracted to focus on the platform ecosystem (Dougherty & Dunne 2011). The situation arises where the platform leader is able to addresses and access the completely innovative elements and focuses on the increase in capabilities. For example, Facebook, Twitter, Amazon, etc. These are even termed as APIs that are generally called Application Programming Interfaces.
There is an increase in the independent software developers that help to utilize and basically incorporate the level of innovation that can benefit the platform in several ways (Baldwin & von Hippel 2011). There are several APIs that Google has introduced such as Google Maps, Google Search and several different segments in particular with digital platforms that build innovative products that are acceptable by consumers. These are basically the key resources that are useful for platform owners to focus on competition and innovation while building applications that derive a benefit to owner and user. Thereby a value is derived while using these platforms with complementary innovation and competition elements. There is the likelihood of competition among internal platforms, supply chain platforms and industry platforms (Cusumano 2010). As such, there is empirical testing that leads to achieving the scope of innovation and competition in a technological and innovative platform.
Conclusion
A theoretical framework is summarized with an economic perspective and technological perspective with conceptualized platforms. There is a major interface that helps to build the attributes while connecting with different types of platforms. There are advantages when focusing on meta-organizations and focus on engineering design and building effective strategies to achieve innovative platforms. Platforms attract organization elements with a continuum that includes industry ecosystems, supply chains, and firms. There are patterns of the platform that are derived from competition and innovation. The existent theory based considerations were introduced with the distinct advantage of focusing on platform competition and innovation. The agent’s behavior is continuously observed and the structural characteristics are managed with the micro-foundations approach. Thereby, it helps to provide a theoretical foundation of applying innovation and competition in relative platforms. It is, however, a difficult task to attract both competition and innovation. There is a platform enhancing ways that are structured with possible competition and innovation while introducing modes of governance in the supply chains.
References
Adner, R & Kapoor, R, 2010, Value creation in innovation ecosystems: how the structure of technological interdependence affects firm performance in new technology generations. Strategic Management Journal vol. 31, no. 3, pp. 306–333.
Baldwin, C Y, & von Hippel, E, 2011, Modeling a paradigm shift: from producer innovation to user and open collaborative innovation. Organization Science vol. 22, no. 6, pp. 1399–1417.
Baldwin, C Y, Woodard, J J, 2009, The architecture of platforms: a unified view. In: Gawer, A. (Ed.), Platforms, Markets and Innovation. Edward Elgar, Cheltenham, UK and Northampton, Mass, pp. 19–44.
Boudreau, K.J, 2012, Let a thousand flowers bloom? An early look at large numbers of software app developers and patterns of innovation. Organization Science vol. 23, no. 5, pp. 1409–1427.
Boudreau, K J, Hagiu, A, 2009, Platform rules: multi-sided platforms as regulators. In: Gawer, A. (Ed.), Platforms, Markets and Innovation. Edward Elgar, Cheltenham, UK and Northampton, Mass, pp. 163–191
Cusumano, M A, 2010, Staying Power: Six Enduring Principles for Managing Strategy and Innovation in an Uncertain World (Lessons from Microsoft, Apple, Intel, Google, Toyota and More). Oxford University Press.
Dougherty, D, Dunne, D, 2011, Organizing ecologies of complex innovation. Organization Science vol. 22, no. 5, pp. 1214–1223.
Eisenmann, T, Parker, G, & Van Alstyne, M, 2011, Platform envelopment. Strategic Management Journal vol. 32, no. 12, pp. 1270–1285.
Gawer, A, & Phillips, N, 2013, Institutional work as logics shift: the case of Intel’s transformation to platform leader. Organization Studies vol. 34, no.8, pp. 1035–1071.
Gulati, R, Puranam, P, Tushman, M, 2012, Meta-organization design: rethinking design in interorganizational and community contexts. Strategic Management Journal vol. 33, no. 6, pp. 571–586.
Suarez, F F, Kirtley, J, 2012, Dethroning an established platform. MIT Sloan Management Review vol. 53, no. 4, pp. 35–41.
Zirpoli, F & Becker, M C, 2011, The limits of design and engineering outsourcing: performance integration and the unfulfilled promises of modularity. R&D Management 41 (1), 21–43.