Strategic Ambidexterity and Platform Firm Performance

Successful organizations thrive by achieving a balance between maintaining alignment in their current operations and being adaptable enough to navigate a constantly changing business environment. This study aims to fill a critical gap in the understanding of how ambidexterity strategies impact the performance of platform business models. Currently, there is limited knowledge of the potential synergies or tradeoffs that may arise from the simultaneous implementation of exploration and exploitation strategies. We argue that strategic combinations of platform exploration with capabilities exploitation may not always yield advantageous results. Our analysis, based on panel data of 1183 cases from U.S. platform companies, supports most of the hypotheses. The findings reveal that both market and product-oriented exploration undertaken by platform firms positively impact performance. However, ambidextrous strategies, which emphasize both exploration and exploitation within and across functional domains, lead to negative performance outcomes. These empirical results offer new insights into the ambidexterity paradoxes concerning adaptability and alignment within the platform context. Our findings suggest that managers should adopt a sequential approach to ambidexterity instead of a simultaneous one. This study contributes to the literature on ambidexterity and platform strategy, encompassing research on the consequences of ambidexterity, organizational adaptation, cross-boundary perspectives, and platform capabilities.