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Customer Complementarity In The Digital Space: Exploring Amazon’s Business Model Diversification

Aversa, P. ORCID: 0000-0003-3175-9477, Haefliger, S. ORCID: 0000-0003-4207-9207, Hueller, F. and Reza, D.G. (2020). Customer Complementarity In The Digital Space: Exploring Amazon’s Business Model Diversification. Long Range Planning, 101985.. doi: 10.1016/j.lrp.2020.101985

Abstract

In spite of the striking evidence that many firms run multiple business models, scholars and practitioners still lack a comprehensive understanding about business model portfolio dynamics, particularly when this happens in the digital space. Prior research on business model diversification tends to focus on supply-side complementarities, such as a firm’s synergies among resources and capabilities. Yet, the demand-side with its customer complementarities remains theoretically and empirically underexplored, despite offering interesting opportunities for firms’ competitive advantage. By developing a qualitative, longitudinal (1995 – 2018) analysis of the various business models developed by Amazon.com, we identify and map how customer complementarities—network effects and one-stop shop effects—can support firm growth and competitive advantage, particularly in the digital space. We identify what we term the ‘integrative business model,’ defined as the business model in a portfolio exhibiting the most (predominantly positive) customer complementarities with other business models. We propose mechanisms for the integrative business model to contribute to sustainable competitive advantage via a causal loop diagram and discuss implications for theory and practice.

Publication Type: Article
Additional Information: ©2020. This manuscript version is made available under the CC-BY-NC-ND 4.0 license http://creativecommons.org/licenses/by-nc-nd/4.0/
Subjects: H Social Sciences > HD Industries. Land use. Labor
Departments: Business School > Management
Date Deposited: 24 Feb 2020 13:21
URI: https://openaccess.city.ac.uk/id/eprint/23775
[img] Text - Accepted Version
This document is not freely accessible until 16 March 2022 due to copyright restrictions.
Available under License Creative Commons Attribution Non-commercial No Derivatives.

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