The Dynamics of Digital Platform Orchestration: Unfolding the Institutional Logics Shifts and Fields Restructuring in the Chinese Used Car Market
Platform businesses have gained increasingly larger shares of the economy. Platforms differentiate from the traditional value chain-based businesses. Platforms link supply-side customers and demand-side customers. The value of a platform is centred around its installed base. Getting initial customers onboard the platform is a critical issue in platform orchestration. However, research gaps exist in clearly understanding the platform adoption process. Existing literature have been emphasizing on the economic and architectural aspects of platform orchestration strategies, but the social or interpersonal aspect of platform orchestration has not yet been fully explored. Furthermore, the pre-existing frameworks also gave rise to the possibility of causality paradox. To fill these research gaps, this research analyses the platform orchestration processes of the top four used car trading platforms in China. This research proposes a theoretical framework using institutional logic and field theory to examine the platform orchestration process. The key findings are the following. First, the adoption of a platform is not a direct economic or rational choice by the interested party, but a result of a sense-making through institutional logics. Second, three platform orchestration strategies have been theorized. 1) A platform can choose to adhere to the existing institutional logics. 2) A platform can leverage the power structure of the targeted market by forging alliances with incumbent players who are not direct participants of the platform. 3) a platform can bypass the existing constraints of the market by differentiating itself from the industry to appeal to end customers’ stigmas. Thirdly, this research resolves the long-standing “causality paradox” in the platform literature, which inaccurately assumes advantage of first-mover platform would perpetually gain more customers given the exponential value generated by its growing network. These findings are generated from three different parts of the data. First, forty-two interviews are carried out. Second, over a hundred documents including news articles, financial reports and internal communication letters are analysed as secondary data to support the primary findings. Third, onsite observations in the forms of field notes. Fourth, supplementary photos. This research proposes a new research agenda focusing on institutional logics to understand the dynamics of platform orchestration process, and fills the research gaps in several areas. It can facilitate firms to choose the appropriate strategy to orchestrate platform ecosystems
Platform, Institutional Theory, Used Car Platforms, Chinese
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