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Cooperation mode selection strategies in platform ecosystems: analyzing brand value, cross-selling, and platform empowerment

Junfeng Dong (School of Management, NSFC Fundamental Research Center on Smart Interconnected System Engineering, Hefei University of Technology, Hefei, China)
Qiman Zhang (School of Management, Ministry of Education Engineering, Research Center for Intelligent Decision-Making and Information System Technologies, Hefei University of Technology, Hefei, China)
Haoyuan Teng (School of Management, Hefei University of Technology, Hefei, China)
Li Jiang (School of Management, Key Laboratory of Process Optimization and Intelligent Decision-Making, Hefei University of Technology, Hefei, China)
Wenxing Lu (School of Management, Hefei University of Technology, Hefei, China)

Journal of Modelling in Management

ISSN: 1746-5664

Article publication date: 17 October 2024

47

Abstract

Purpose

This paper aims to investigate the vertical cooperative relationship between the core enterprise and the manufacturer within the platform ecosystem, specifically analyzing the optimal decision-making processes of both parties under the original equipment manufacturer (OEM) and original brand manufacturer (OBM) modes.

Design/methodology/approach

This paper uses game theory to analyze the problem, considering factors such as brand value difference, cross-selling and platform empowerment. It constructs the game models for both OEM and OBM modes and discusses the selection strategies for the cooperation mode.

Findings

The results indicate that the choice of cooperation mode by the manufacturer and the core enterprise depends on the relative size of their brand values. In cases of inconsistent choices, cooperation can be improved by designing a transfer payment contract. When the brand value is constant, the product price is comprehensively affected by cross-selling revenue, price elasticity coefficient, cost coefficient of sales effort and cost coefficient of platform empowerment. The enterprise reduces the price only when the potential revenue brought by increasing product sales exceeds the marginal profit brought by increasing product pricing; otherwise, it raises the sales price.

Originality/value

The platform ecosystem is emerging as a future direction for business mode development. However, there is a paucity of research on the cooperation modes between manufacturers and core enterprises within the platform ecosystem.

Keywords

Acknowledgements

This study is part of the research work of the National Social Science Fund Project of China (21AZD116), National Natural Science Foundation of China (72188101), Anhui Provincial Natural Science Foundation (2208085MG182, 2308085MG224) and the Fundamental Research Funds for the Central Universities of China (PA2023GDGP0111). The authors are grateful to the senior editor, associate editor, and anonymous reviewers whose comments have improved this paper considerably.

Citation

Dong, J., Zhang, Q., Teng, H., Jiang, L. and Lu, W. (2024), "Cooperation mode selection strategies in platform ecosystems: analyzing brand value, cross-selling, and platform empowerment", Journal of Modelling in Management, Vol. ahead-of-print No. ahead-of-print. https://doi.org/10.1108/JM2-03-2024-0065

Publisher

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Emerald Publishing Limited

Copyright © 2024, Emerald Publishing Limited

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