ESTT at the EGOS Colloquium 2021

ESTT members G. Reischauer, A. Engelmann and W. H. Hoffmann contributed to the 37th EGOS Colloquium (July 8-10, 2021) that was held online with the paper “Tankers that ride the wave: How incumbents innovate in ecosystems in the face of challengers”. The abstract is as follows:

Research suggests that incumbents seldom recognize challengers early enough, and that they often get disrupted as a result. Yet, there are exceptions, and multiple incumbents have survived in the face of even strong challengers. Why do some incumbents succeed in recognizing challengers and surviving disruption to their ecosystem, while others fail to do so? We explore this puzzle with a longitudinal study of how a German carmaker innovated in its in-car navigation ecosystem. We suggest that an important factor explaining why incumbents successfully resist challengers’ disruption is to adapt their ecosystem strategy. We find that in our empirical setting, the incumbent abandoned its initial gatekeeping strategy through which it exerted a tight control over prespecified ecosystem participants’ innovation flows, to pursue a multigating strategy that encouraged a broader range of innovation flows from ecosystem participants and ecosystem outsiders. The incumbent changed the strategy because it recognized that its ecosystem was being challenged by firms that had not only a comparative ecosystem advantage but also promised a superior future value creation. We theorize these dynamics with a process model of incumbent ecosystem innovation. The main contribution of our paper to ecosystem research is to identify under which conditions incumbents can recognize a firm as challenger to their ecosystem and to detail how incumbents successfully innovate in their ecosystems given challengers.