Balancing generativity and control when developing digital platforms in product development firms A qualitative case study of Volvo Cars

Abstract

Digitalization has affected the essence of products, services and operation which has made a large impact on product development. Traditional product development firms, such as automotive manufacturers, normally undergo a four to five year life-cycle which nowadays is causing products to look old before even entering the market. Firms nowadays innovate by creating platforms rather than single products, as a way to exploit the flexible and open affordances enabled by digitalization. However, managing digital platforms and multi-sided markets entails a lot of strategic challenges and platform providers are struggling to establish and sustain their multi-sided markets. There are always contradictions between maintaining control over the platform and at the same time stimulating third party developers to join the platform and develop new applications. This thesis therefore aims to investigate such contradictions when managing digital platforms. The research question is: How do product developing firms balance generativity and control when developing digital platforms? This study was conducted through several interviews with employees at Volvo Cars, who are in charge of developing and building platform strategies. The three digital platforms Sensus Connect, Connected Vehicle Cloud, and Roam Delivery were analyzed in this study. To get an understanding of how product development firms develop their digital platforms the Competing Value Framework (CVF) was used in order to analyze existing contradictions between flexibility and control, and between internal and external focus. With the help of the CVF, the analysis showed that the different digital platforms were all founded in different quadrants. This implied that by having multiple platforms in each quadrant in the CVF, it gives a product development firm the opportunity to balance generativity and control.