How does digitalization enable well- established focal firms to maintain or expand their ecosystem in a competitive environment?

Abstract

In the age of digitalization and interconnectedness, it is crystal clear that new digital technologies represent strategic instruments for companies seeking to differentiate their business from their competitors. Yet, most companies even the major ones lack the expertise required to fully embrace and drive innovation. This is why collaboration with diverse entities operating in various industries is key to the success of innovative projects since each entity complements each other's distinctive capabilities to deliver a unique output resulting from the combined efforts of several complementary actors, leading to the development of business ecosystems. In this paper, we support and address the assumption that digitalization, more precisely disruptive technologies, enable the expansion of existing ecosystems constructed around a Focal firm (Adner, 2017) providing it with strategic instruments for building robustness and addressing disruption aimed at displacing an established industry. In this way, thanks to innovative solutions, the resilience of the ecosystem will be strengthened through greater alignment of the ecosystem participants towards a common goal for which they will devote resources. As a result, the lead firm will build barriers around its ecosystem preventing it from being disrupted by competing actors and securing its leading position.