Make, Buy, or Join: Evaluating Platform Strategies of Established Companies

• Applicant: Dr. Maximilian Schreieck
• Subject Area: Accounting and Finance ; Data Management, Data-Intensive Systems, Computer Science Methods in Business Informatics
• Term: from 2020 to 2022
• Project identifier: Deutsche Forschungsgemeinschaft (DFG) - Project number 444990299

• Final Report Year: 2022

Final Report Abstract

The research project "Make, Buy, or Join: Evaluating Platform Strategies of Established Companies", funded as part of the Walter Benjamin Programme, focused on the question of whether and how established companies can be successful with digital platforms. This question also gained importance during the project period, as on the one hand the success of tech companies with digital platforms continued to increase and on the other hand, only a few established companies were able to demonstrate success with digital platform strategies. The first study of the project analyzes platform strategies in the financial industry. With the help of the event study method, I showed that banks that announce the construction of digital platforms achieve better stock market valuations than those that do not implement platform strategies. Furthermore, I demonstrated that multinational banks record a stronger increase in stock market valuation than national banks. The focus of the study was on the "Make" strategy, i.e. the internal implementation of a digital platform because this was the predominant approach in the financial industry. In the second study of the project, the scope was broadened and the platform strategies of the 1500 largest, listed US companies were examined. Thereby, I differentiated the make and the buy strategy. The results show that only the make strategy has a positive effect on the growth opportunities of companies, while the buy strategy showed a short-term negative effect. Furthermore, there was a moderating influence of the top management team. In particular, when companies employed a "Chief Digitalization Officer", an organic implementation of a platform strategy had a positive impact on the growth opportunities of the firm. The results of the project serve as a basis for further research on digital platforms. On the one hand, further research is needed to identify differences between industries. On the other hand, the role of the top management team can be examined in even more detail, for example by considering other characteristics of the members of the top management team, such as their career paths and tenure.

Publications

• Computing and Social Welfare. Electronic Markets, 32(2), 417-436.
  Clemons, Eric K.; Waran, Ravi V.; Hermes, Sebastian; Schreieck, Maximilian & Krcmar, Helmut
  
• Digital Platform Strategies: The Role of the Digital Upper Echelon, Conference on Information Systems and Technology (CIST); Indianapolis, USA
  Schreieck, M., Gao, Y., Thatcher, J. & Krcmar, H.
  
• Essential Platform Infrastructure and the Need for Regulation. 55th Hawaii International Conference on System Sciences, Maui, Hawaii, USA
  Hermes, S., Schreieck, M. & Thatcher, J.
  
• From Product Platform Ecosystem to Innovation Platform Ecosystem: An Institutional Perspective on the Governance of Ecosystem Transformations. Journal of the Association for Information Systems, 23(6), 1354-1385.
  Schreieck, Maximilian; Wiesche, Manuel & Krcmar, Helmut
  
• Governing innovation platforms in multi-business organisations. European Journal of Information Systems, 32(4), 695-716.
  Schreieck, Maximilian; Wiesche, Manuel & Krcmar, Helmut
  
• Mini-App Ecosystems. Business & Information Systems Engineering, 65(1), 85-93.
  Schreieck, Maximilian; Ou, Ange & Krcmar, Helmut
  
• The Need to Revise Copyright Law to Reflect the Changing Costs and Benefits of Modern Digital Reuse of Artistic Creations. 55th Hawaii International Conference on System Sciences, Maui, Hawaii, USA
  Clemons, E., Schreieck, M. & Teilmann-Lock, S.
  
• User Value Perception of Native Apps versus Mini Programs: A Means-End Theory Approach. Journal of Service Management Research, 6(3), 167-180.
  Ryu, Sunghan; Cheng, Kathleen & Schreieck, Maximilian
  
• Detecting Feature Requests of Third-Party Developers through Machine Learning: A Case Study of the SAP Community. 56th Hawaii International Conference on System Sciences, Maui, Hawaii, USA
  Kauschinger, M., Vieth, N., Schreieck, M. & Krcmar, H.