Center to Component to Complement: Incumbents' Product Strategy in Response to Ecosystem Emergence.

The paper examines the evolution of firms' product scope as their once independent products turned into components of an integrated product system and ultimately complements of an open ecosystem. An increase in interdependencies with other actors' products creates opportunities for governing components internally but also reduces the benefit of internalizing complements due to the ease of mix and match by end-customers. Following a research-question approach with quantitative and qualitative data in the U.S. medical imaging device industry (1981-2008), I find that on average incumbent imaging equipment firms reduced product diversity when they became part of integrated product systems or an ecosystem but diversified when they gained access to the connecting technology early on. These findings suggest that the nature of interdependencies and the (timing of) access to the core innovation for managing interdependencies matters. [ABSTRACT FROM AUTHOR]