Network Externality, Capability Portfolio Allocation and Growth Performance of Internet Enterprises

Purpose/Significance Capability is the internal source of enterprises’ growth, the capability portfolio allocation is closely related to the Internet enterprises’ network externality industrial economic characteristics. Therefore, it is necessary to comprehensively analyze the internal relationship between network externality, capability portfolio allocation and growth performance of Internet enterprises. Design/Methodology This paper divides the internet enterprises’ capabilities into existing business capabilities (reflecting the current business operation capabilities of the enterprise) and dynamic capabilities (reflecting the future business development capabilities of the enterprise), then establishes a model framework of network externality, capability portfolio allocation and growth performance of Internet enterprises. Conclusions/Findings Influenced by network externalities, when they build capability portfolio, Internet enterprises tend to pay more attention to dynamic capabilities than traditional enterprises; under the premise of tight cost budget, when Internet enterprises allocation capability portfolio, they usually give priority to meet the resource requirements of dynamic capabilities to grasp new business opportunities, besides, the capabilities in the capability portfolio have a significant positive relationship with their own marginal output and a significant negative relationship with their respective marginal cost.