Platform-based service innovation and system design: research opportunities

Publication Date11 Jun 2018
AuthorWenhui Fu,Qiang Wang,Xiande Zhao
SubjectInformation & knowledge management,Information systems,Data management systems,Knowledge management,Knowledge sharing,Management science & operations,Supply chain management,Supply chain information systems,Logistics,Quality management/systems
Platform-based service
innovation and system design:
research opportunities
Wenhui Fu
China Europe International Business School,
Shanghai, China
Qiang Wang
School of Management, Xian Jiaotong University,
Xian, China, and
Xiande Zhao
China Europe International Business School,
Shanghai, China
Purpose The purpose of this paper is to explore research opportunities for service innovation and system
design in network platforms by investigating representative case examples in an emerging market, China.
Design/methodology/approach The authors provide four case examples to illustrate the manner in
which network platforms facilitate and lead to service innovation and effective system design. Then, the
authors propose nine research directions that present significant research opportunities, and the authors
make theoretical and methodological suggestions.
Findings The results indicate that research opportunities exist mainly in three areas: ecosystem design and
evolution, including role design, coherence and sustainability issues; leaderparticipant collaboration,
including governance, co-opetition and innovation stimulation issues; and transformation of traditional
industries, including process informatization, modularization and standardization issues.
Originality/value This study extends the platform-related literature by showing new platform features
represented by case evidence from emerging economies, and provides recommendations to guide and direct
management practices and efforts in platform-based service innovation and system design.
Keywords Service innovation, System design, Network platform, Research opportunities
Paper type Research paper
1. Introduction
Platform-related studies have multiplied at an astonishing rate over recent years (Thomas
et al., 2014). However, there are still few theoretical explanations of how new platform
businesses have abruptly upended their industries (Van Alstyne et al., 2016), or what
theoretical underpinnings and systematic guidance really work for the platformization of
traditional businesses (Zhao et al., 2015). It has been pointed out that theoretical work on
platform-based service innovations and system design has lagged behind business practice
(Suarez and Cusumano, 2009; Thomas et al., 2014). This is partly because platform studies
have been rooted in different intellectual traditions and distinct theoretical perspectives and
levels (Gawer, 2014; Thomas et al., 2014). The consequent limited and divided research
agenda constrains the exploration of both system design and service innovation actions;
these areas require a comprehensive and coherent theoretical grounding (Gawer, 2014).
Moreover, although there are many descriptive and case-based studies on how platform
design their systems and provide innovative services, they cannot fully reflect the Industrial Management & Data
Vol. 118 No. 5, 2018
pp. 975-997
© Emerald PublishingLimited
DOI 10.1108/IMDS-03-2017-0130
Received 31 March 2017
Revised 31 October 2017
31 December 2017
Accepted 18 January 2018
The current issue and full text archive of this journal is available on Emerald Insight at:
This research was supported by National Natural Science Foundation of China (71602159,
71420107024, 71572141).
This paper forms part of a special section Featured issue on supply chain innovation.
complexity and ever evolving new features of platform practices. The findings of previous
studies have been mainly derived from famous case examples in advanced economies
(e.g. Airbnb, Apple, Facebook, etc.). Platforms in advanced economies tend to have
standardized structures and partnerships, whereas platforms in emerging economies like
China are more often still undergoing the platformization process, with complicated and
dynamic structures and sometimes highly influenced by government policy.
In order to fill the research gap and provide a coherent summary of the platform
literature, with a focus on platform-based service innovation and system design, in a
complementary paper, Platform-based service innovation and system design: A literature
review, we have synthesized a framework of topics and research perspectives to reveal the
interactions between platform service innovation, system design and other related factors.
Based on that foundation, the objective of this paper, therefore, is to explore research
opportunities in platform-based service innovation and system design, with a focus on
emerging markets. We choose the Chinese market as the main research object, where the
platform business approach has been widely adopted not only by companies in new
internet-related industries (e.g. Tencent, Alibaba) but also by those in traditional
manufacturing industries (e.g. Haier, E-coal). These platform firms were also encouraged by
the Internet Plusstrategy proposed by the Chinese government to promote innovation
and industrial transition stimulated by the internet and information technology (IT).
This specific context can provide newer and richer insights into research opportunities in
the areas of platform-based service innovation and system design.
The paper proceedsas follows. Section 2 describes the case study methodology.Section 3
presents four case studies, of Tencent, SJET, Zhubajie and E-coal, to illustrate the range of
challenges inservice innovation and system designpractices that platforms face.In Section 4,
through a cross-case analysis, the common challenges arising in the different cases are
identified,along with new research directions, and comparedwith current knowledgeof topics
in our literature review. The research gaps and opportunities are discussed. In Section 5,
methodologicalsuggestions to deepenthe understanding of platform-based service innovation
and system design are outlined. In Section 6, the paper concludes with a discussion of the
theoretical and practical implications of the study findings.
2. Case study methodology
This study adopts a case study methodology based on grounded theory (Eisenhardt, 1989;
Strauss and Corbin, 1990; Yin, 2009). This inductive approach is appropriate when
examining new phenomena about which little explanatory theory exists (Suddaby, 2006;
Gligor and Autry, 2012).
Figure 1 shows the research process, which follows well-established guidelines proposed
by Yin (2003). The first step is to generate an empirical question concerning the
phenomenon of interest. In this study, the objective is to explore the challenges in service
innovation and system design practices that platforms face. Over the past few years,
1. Select a phenomenon 2. Case selection 3. Data collection 4. Data analysis 5. Findings
. Coding and categorizing
. Abstracting higher order
constructs (Research directions)
. Comparison to current
knowledge of these research
directions in literature
. Deriving detailed research
questions to be addressed
(Research opportunities)
What challenges does
the platform face in
terms of service
innovation and system
. Set case selection
. Select four sample
firms: Tencent,
SJET, Zhubajie and
. Choose data collection
method: in-depth interview,
. Select interview participants:
high-/middle-level managers of
the four sample firms
. Semi-structured interviews
with a protocol
Figure 1.
The inductive
research process

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