How are Complementors Swimming with the Shark?

Abstract: Following a brief introduction on the platform ecosystems, the impacts of the complementors to the platforms are introduced. This study examines the dynamics of collaboration and competition between digital platforms and their complementors; mainly, it focuses on complementors’ defence strategies for competing against the platform. A review of the literature about the collaboration and competition between platform owners and their complementors is discussed with the literature about their interdependency and the defence strategies. To answer the research questions arising from these aspects, an empirical research design of multiple case study was conducted on five Amazon.com sellers. Evidence that both sides are adding value to each other in different ways. Complementors add value by improving product diversity and decreasing the price levels while the platform owner gives access to its loyal buyers. However, collaboration while competing is likely to harm complementors due to the power advantage of the platform. Therefore, they implement several strategies to compete against Amazon, such as becoming less dependent and avoiding competition with the platform owner. Finally, the findings of this paper are discussed with the theoretical framework, and practical implications are suggested for the managers in the industry.