Supplier-complementor alliances: Enhancing value creation for the ecosystem

• Main Author: CHEN, Liang
• Format: text
• Language: English
• Published: Institutional Knowledge at Singapore Management University 2024
• Subjects: ecosystem; strategic alignment; Entrepreneurial and Small Business Operations; Strategic Management Policy
• Online Access: https://ink.library.smu.edu.sg/ami/261; https://ink.library.smu.edu.sg/context/ami/article/1249/viewcontent/7_AMI_Jul24_SupplierComplementor.pdf
• Institution: Singapore Management University

1. Suppliers can better protect their positions in an ecosystem by building stronger relationships with ‘complementors’, which are businesses that offer products or services that enhance the value of the core product. Such supplier-complementor alliances (SCAs) can enhance the value of the entire ecosystem, including that of the leader. 2. SCAs such as Nvidia-Adobe drive innovation by encouraging suppliers to develop products that cater to broader needs beyond the ecosystem leader’s specific demands. This strategic alignment between suppliers and complementors also ensures that suppliers build a more resilient and diversified business model. 3. SCAs present both opportunities and challenges within ecosystems–suppliers can benefit from increased bargaining power, which could be a challenge to the ecosystem leader. Effective management of SCAs is thus crucial for maintaining a healthy ecosystem.