Digitalisation and complementary integration: a case study of a Chinese real estate company

Abstract

In the digital age, incumbents are seeking new strategies to address their lack of digital capabilities and resources. To avoid disruption, complementary integration offers incumbents a mean to explore creative destruction proactively. Complementary integration is organised around dynamic capabilities and resource management, transforming incumbents' identities through implementing complementary activities to achieve value chain integration. However, few empirical studies have explained how complementary integration is achieved. Focusing on the development of construction robots by a Chinese real estate company, this paper uses dynamic capabilities and resource management theories to show how incumbents can achieve complementary integration through digital upgrading. The paper emphasises that the ability to identify complementary industries, seize and bundle complementary resources, and re-configure and leverage complementary capabilities helps to transform traditional incumbents into complementary industry leaders. This process leads to the emergence of complementary integration strategies, which create a new industry and market logic. In addition, the paper emphasises the nuances of complementary integration and cross-boundary disruption in expanding the boundary of firms.