HARINA DE QUINUA

Literature on business strategies suggests that organizations can be subsumed and classified into three industry-independent strategy profiles (Miles et al. 1978; Sabherwal et al. 2001): (1) Defender, (2) Prospector, and (3) Analyzer. Strategy profiles are useful theoretical lenses to classify organizations within existing business environments (e.g., competitor analysis), by categorizing characteristic attributes (e.g., competition and innovation activities) that are pertinent for certain types of strategy profiles. The Defender follows an exploitative business strategy. Presenting an established organization within existing and stable business environments, the Defender prioritizes predictability and efficiency in its daily operations and business logic, which is usually reflected in exploiting existing technologies, assets, methods, products, and markets to optimize its cost structure in a continuous fashion. Accordingly, the

Defender shows less flexibility regarding unproven innovations. Having its focus on exploitation, the

Defender achieves its competiveness by creating high-quality and high-volume standard products that are targeted to serve mainstream markets. Likewise, to the Defender, the Cost Leadership profile (Porter 1980) shares similar traits, which emphasize an economy of scale and scope in its value creation logic.

As its name indicates, the Defender presents an incumbent organization that defends the status quo by maintaining and refining existing value creation logic for an existing business environment, such as market position, and existing revenue-generating products. Considering the Defender through the

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disruptive innovation lens, it typically presents organizations that have adopted the strategy of established innovations to sustain existing products within existing mainstream markets.

The Prospector follows an explorative business strategy. Prospector organizations are usually present in the form of flexible and agile entities that seek experimentation and accept risk with new technologies or new business environments—organizations where revenue outlooks are opaque. If the Prospector is successful with its exploration, it grants favorable economic opportunities compared to its rivals, such as benefiting from a first mover advantage in profitable business environments, or possessing proprietary knowledge (i.e., dynamic capabilities) for innovations that promise high-growth opportunities (e.g., blockchain systems). To some extent, the Prospector mirrors the Differentiator strategy profile (Porter 1980) and seeks its advantage in serving profitable market niches with unique products (e.g., brand perception) that are higher valued by the market. As the name indicates, the Prospector explores new innovations that may result in new value opportunities. Thus, the Prospector is considered an initiator of technology and market change, if the innovations are perceived to be superior compared to established innovations (e.g., price, speed, quality). Considering the Prospector through the disruptive innovation lens, it typically represents organizations that follow the path of disruptive innovation, as Prospectors

experiment and use atypical means to offer competitive products that have similar value propositions compared to established innovations.

The Analyzer has an ambidextrous strategy posture, which combines the best traits of the Defender and

Prospector to minimize risk (i.e., Defender), while at the same trying to maximize new business opportunities (i.e., Prospector). The Analyzer has the competitive advantage of having a solid foundation of core products that provide a steady and reliable revenue stream to ensure organizational survival for the long run. From this stable foundation, though, the Analyzer has the ability to enter carefully into new business endeavors that are alien to the Analyzer. As such, Analyzers behave like a second mover, by observing and following Prospectors concerning new technology adoptions or entering into new markets. In so doing, organizations with an Analyzer strategy profile are usually quick in catching up with Prospectors. Analyzers are fast second movers, because they study and avoid the initial trial costs incurred by Prospectors—and secondly, Analyzers have the advantage of having a solid economic foundation from their revenue-generating core businesses, which in turn allows them to close the gap with Prospectors. From a disruptive innovation theoretical perspective, the Analyzer is receptive towards exploration opportunities. But at the same time, the Analyzer does not initiate change. In this sense, the

Analyzer is arguably a strategy profilethat accelerates the adoption of disruptive innovations, but it is not the inventor of disruptive innovations.

Take Google Pay as an example. Google Pay is a highly flexible digital payment platform that empowers third parties to co-create customized payment applications. Nevertheless, Google maintains control over

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the Google Pay payment platform. Third-party developers who would like to integrate Google Pay into their own applications are required to register and are afterwards reviewed to see if they followed technical and legal standards, since Google has to fulfill the requirements demanded by credit card payment networks (i.e., the network layer of a digital platform), which are component providers of Google Pay’s network layer, in order to have access to a global payment network. In this sense, Google Pay resembles an Analyzer Business Design Profile that pursues innovation by providing flexibility with third parties to increase its market reach, but at the same time it exercises control through maintaining payment network access.

From above, I infer that digital platforms similarly exhibit strategy profiles (Miles et al. 1978), leading to what I construe as Business Design Profiles. Specifically, the way digital platforms adopt or reject certain assets and methods, the way modularity is practiced between third parties (e.g., open, moderated, or proprietary), and the type of innovations permitted (i.e., established or disruptive innovation) within digital platform boundaries may assist in identifying Business Design Profiles that are supportive in facilitating disruption. I am not aware of past studies that specifically discuss strategic profiles for digital platforms.