Competing in the Networked Economy: The Development, Sustenance and Strategic Implications of Digital Platforms A thesis submitted in partial fulfilment of requirements for the degree of Doctor of Philosophy Cheuk Hang Au The Discipline of Business Information Systems The University of Sydney Business School 2020 Supervised by Associate Professor Barney Tan, Business Information Systems Statement of Originality This is to certify that to the best of my knowledge, the content of this thesis is my own work. This thesis has not been submitted for any degree or other purposes. I certify that the intellectual content of this thesis is the product of my own work and that all the assistance received in preparing this thesis and sources have been acknowledged. Signature Cheuk Hang Au Name i Publications Associated with this Thesis Chapter 2 draws on material published as "Au, C. H., Tan, B., and Sun, Y., 2020. "Developing a P2P Lending Platform: Stages, Strategies and Platform Configurations," in Internet Research • I designed the study, analysed the data and co-wrote the paper. Authorship is based on contribution. Chapter 3 draws on material submitted as "Au, C. H., and Ho, K. K. W., 2020. "The Anti-Aging Secret of Massively Multiplayer Online Game (MMOG): Managing its Lifecycle," to Australian Journal of Management, currently under advanced round review. • I designed the study, analysed the data and co-wrote the paper. Authorship is based on contribution. Chapter 4 draws on material published as "Au, C. H., Tan, B., Leong, C., Ge, C., 2018. "Disrupting the Disruptor: The Role of IS in Facilitating Second-Mover Advantage," in Thirty-Ninth International Conference on Information Systems (ICIS), San Francisco, USA • I designed the study, analysed the data and co-wrote the paper. Authorship is based on contribution. Student name: Cheuk Hang Au Signature: Date: 13.11.2020 As a supervisor for the candidature upon which this thesis is based, I can confirm that the authorship attribution statements above are correct. Supervisor Name: Barney Tan Signature: Date: 13.11.2020 This is to certify that to the best of my knowledge, the content of this thesis is my own work. This thesis has not been submitted for any degree or other purposes. I certify that the intellectual content of this thesis is the product of my own work and that all the assistance received in preparing this thesis and sources have been acknowledged. Student name: Cheuk Hang Au Signature: Date: 13.11.2020 ii Acknowledgements It was the 18th of September 2015. I was on a footbridge in Hong Kong, where I determined in doing a PhD after receiving my GMAT score. Two years later, I know 18th September was the birthday of Prof. Barney Tan– My Brother, Idol and Supervisor. It is all miracles, and I would first like to offer my thanks to God. During my PhD journey, I met many friends and senior academics. The discipline of Business Information Systems (BIS) has been so warm. The utmost important part of the journey, and probably my life, is Barney. Before becoming his student, I had no idea about qualitative research. But he has been helping me in every milestone while ensuring that I am absorbing and learning despite my weaknesses and limitations. He has also arranged the teaching opportunities for me in INFS1000 so that I could learn more about how to teach. Beyond the advancement of research and teaching skills, I have also learnt how to be a real, mature and responsible man from the demonstration of Barney. It was not a national service, but it was an ah-boys-to-men journey. Barney is, and will be my BIS (I mean Brother, Idol and Supervisor here). I am also grateful to Prof. Dirk Hovorka and Prof. Sebastian Boell, who has been advising me, occasionally with a sense of humour when I got puzzled in my research. I also want to express my gratitude to Prof. Daniel Schlagwein, who has invited me to teach INFS1020. You have made me a more nurtured researcher. Beyond academics, I am also grateful for having so many good peers along my journey, including Evelyn, Blair, Asaf, Xuetao, Priya, Daniel Kim, Prakash, Anna, Tim, Natalie, Christian, Grace, Lin, Siqi and YT. I am also delighted to meet Ann and Jiaqi, two visiting doctoral students from Mainland China. On top, I am grateful that Ben and Sophia, the HDR iii training coordinators, have been supporting me in different forms, such as counselling and coordinating various events. Most importantly, free food in all events! Vitalina was giving her support through the ups and downs of this journey. Without her, I might have never been able to complete this thesis. Thank you that you are always there for me. Outside USyd, I should also acknowledge Prof. Kevin Ho, Prof. Carmen Leong, Prof. Felix Tan, Prof. Xiao Xiao, Prof. Yuan Sun and Prof. Chunmian Ge. They were supporting my data collection and paper writing. Especially, I am grateful to Prof. Ho as he had the confidence in my case study paper using netnography, an unconventional method that he had never used before. I would also like to express my gratitude to Dr. Richard Lui, Dr. Walter Fung, Prof. Wai- Ming Mak, Dr. Pamsy Hui and Prof Xin Xu from the Hong Kong Polytechnic University. They have been giving me support, especially when I visited Hong Kong from time to time. Last but not least, I must reserve a few lines to express my gratitude to Momo the Corgi. I always feel relieved during the journey when I see her online despite the uncountable burdens. Of course, thank you, Mr. Derek Ho and Miss. Yen Lo for taking care of her. iv Abstract The proliferation of the Internet has enabled the development of digital platforms, i.e., digital commercial networks of discrete entities (such as suppliers, intermediaries, and customers) that are connected through mutual dependencies and/or formal contracting. Information systems (IS) researchers have advocated digital platforms as a new and promising research field. This thesis presents three essays to address the underexplored issues of digital platform management. More specifically, this thesis investigates a range of strategic implications, including how digital platforms may be enacted and sustained and how digital platform hosts may compete strategically using different IS capabilities. The first essay considers the case of an online peer-to-peer (P2P) lending platform to reveal how digital platforms may be developed. The study reveals that the development process of an online P2P lending platform can unfold in a specific sequence across three stages, and the development of a particular side of the platform should be emphasised in each stage, i.e., partners, followed by lenders, and then borrowers. Each stage is also distinctive in terms of its strategies and platform configuration outcomes. The process model contributes to an in-depth view of how digital platforms should be established and nurtured to complement existing studies in the growing research area of digital platforms, especially considering the increasing number of digital start-ups that have adopted platform-based business models. In addition, this study suggests strategies that can facilitate the development of platforms in various stages, which can potentially serve as a foundation for formulating guidelines for managers of P2P lending and other digital platforms, allowing them to optimise the development of their platforms and extend the benefits of their services to a broader base of customers. The second essay discusses the issue of sustenance in the context of digital platforms based on a case study of a massively multiplayer online game (MMOG). Adopting a theoretical lens of product lifecycle theories, a four-stage lifecycle model of digital platforms in v conjunction with the technology–organisation–environment (TOE) framework has been proposed, and the theoretical implications of product lifecycle theories are presented. Furthermore, the emphasis on different dimensions and strategies is discussed for each stage. In turn, the model can facilitate the hosting of MMOGs and other types of digital platforms to manage the overall platform lifecycle and thus sustain the platform. The third essay reports a comprehensive study of the role of IS in the achievement of second-mover advantages (SMA) in the context of digital disruption (DD) based on a case study of an accommodation-sharing platform. The fact that early-mover advantages are short- lived in the context of DD creates opportunities for second-movers, who can avoid the uncertainty in a competitive environment and lower costs by imitating, and often improving upon, the business models of early-movers. The benefits of SMA may be facilitated by IS, but its precise role in facilitating SMA is unknown, especially in the context of DD. Based on the case study findings, a three-stage process model that may explain the process of IS-enabled SMA has been proposed. These stages are marked by the employment of distinct strategies and IS capabilities, which, in turn, leads to several strategic implications for digital platforms. The proposed model can potentially serve as a foundation for formulating guidelines for digital platform hosts to enjoy the benefits of IS-enabled SMA and thus compete strategically. Overall, the three essays are targeted at contributing to the research on development, sustenance, and strategic implications in the context of digital platforms. vi Table of Contents Statement of Originality ..................................................................................................... i Publications