V09 From products to platforms
Key Conzepts: - Platforms - Step processes and options - Product architecture - Platform strategies Abilities: - Critical assessment of different platform strategies - Understanding what makes a product a platform -
Key Conzepts: - Platforms - Step processes and options - Product architecture - Platform strategies Abilities: - Critical assessment of different platform strategies - Understanding what makes a product a platform -
Set of flashcards Details
| Flashcards | 19 |
|---|---|
| Language | Deutsch |
| Category | Micro-Economics |
| Level | University |
| Created / Updated | 05.01.2020 / 13.01.2020 |
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What is the definition of platform.
- A platform is a foundation technology or service that is essential for a broader, interdependent ecosystem of businesses
- The platform requires complementary innovations to be useful, and vice versa
Name 2 different functions for performance of a step-processs and platform functions.
Variance:
Random spread out of the performance of production steps / platform complements from the average.
Options:
Things (complements) you can decide to choose. -> only exists for options!
What is sharing economy and what are its effects.
Sharing economy is a way of distributing goods and services, where individuals are said to rent or share things like their cars, homes and personal time to other individuals in a peer-to-peer fashion.
Effects:
- Much more employees (individuals on platform)
- Only few make money (platform owner)
Explain the effect of performance variance in a step-function vs. on a platform.
Given a performance variation in process/element of: 20, 40, 60.
What is the total performance in a step-function bzw. platform?
Step-function:
The performance of the whole supply chain is determined by the bottleneck performance. Therefore performance variance is contraproductive. Total Performance: 20.
Platform:
On a platform the option with the highest performance can be chosen. Performance variance is good for platforms. Total Performance: 60.
What are de characteristics of step process and platform organizations?
- Step process (result in large, vertically integrated firms)
- Interdependence
- Hierarchy
- Coordination
- Risk-aversion
- Integrality
- Platforms (result in small firms with large ecosystems)
- Independence
- Openness
- Option value
- Risk increase (for complements!)
- Modularity
- Innovation, variation
processes are becoming platforms. Why now?
Digitalisazion is a great catalyst because of the following features.
- Separating information from physical assets
- Explosion of access
Name two different types of Platforms. Describe, give an example and explain what they rely on.
Transaction Platforms:
"Serves as an intermediary for direct exchange." - rely on commitment
(Bsp: Air BNB, Twiter, App-Stores)
Innovation Platforms:
"Serves as a technological foundation upon which other firms develop complementary innovation" - rely on investment
(Bsp: Apple IOS, Andriod, Linux, Nintendo)
Hybrid Companies:
"Take both roles of an transaction and innovation platform"
(Bsp: Apple, Google, Microsoft, Facebook, Amazon)
Chicken and egg problem: If network effects are important how do you get the interacting groups/customers on board? Name 3 possibilities with an example each.
- Create stand-alone value for customers (Single-Player mode for X-Box)
- Subsidize one or multiple sides (TWINT pays for signin in)
- Bring aboard multiple sides at the same time (UBER starting in one city and exand)
What is direct and indirect network effects? Name examples for transaction and innovation platforms.
- Direct network effects: The attractiveness of the platform to a user depends on how many others are already on the platform.
- Transaction platform: Twitter
- Innovation platform: Linux
- Indirect network effects: The value of joining the platform to side X depends on whether side Y is already on the platform (effects can also be negative).
- Transaction platform: AirBnB
- Innovation platform: PlayStation
Name 4 possible platform strategies and define them.
Tipping:
"Set of activities or strategic moves that companies can use to shape market dynamics and win a platform war."
Multihoming:
"Complementors being active on multiple platforms"
Barriers to entry:
"How difficult is it for complementors to join a platform ecosystem"
Switching cost:
"How unattractive it is for a user to leave thee platorm"
According to this Paper there are two strategies for "wannabe" companies to become a platform leader. Name them.
(Gawer Cusumano 2012 - How companies become platform leaders)
- Coring: "Make your Platform/Product to a esssential element of a technological system and it's market"
- Tipping: "Set of activities or strategic moves that companies can use to shape market dynamics and win a platform war."
Why do winner-takes-all (or -markets) exist? Name transaction and innovation examples of winner-takes-all and no winner-takes-all markets.
Important enough network effects can (and will!) converge an entire market to one platform.
- Winner-takes-all market
- Transaction platform: Facebook
- Innovation platform: Android
- No winner-takes-all market
- Transaction platform: Tinder
- Innovation platform: Playstation
Name the two esssential business aspects of coring according to this paper.
(Gawer Cusumano 2012 - How companies become platform leaders)
- Convince other companiess to join the ecosystem and develop complementary platforms.
- Decide how to protect own source of profit while enabling complementors to make profit and protect their own proprietary knowledge.
Name 3 problems of platform leaders.
(Gawer Cusumano (2012) - How companies become platform leaders)
- How to maintain the intefrity of the platform
- How to let platforms envolve technologically
- How to maintain platform leadership
In this paper are 4 strategies of tipping mentioned. Name them.
(Gawer Cusumano 2012 - How companies become platform leaders)
- Licence intellecual property (Plug ins for Apple products)
- Subsidize one or both side of the market (TWINT)
- Tipping across Market (Microsoft Edge, Android from Google)
- Competitors / Users Building coalition (TWINT and Banks vs. Samsung Pay)
What is industy capability stack?
(Gawer Cusumano (2012) - How companies become platform leaders)
The form of the collaborative strucutre of a platform (interaction between complementors and platform). Interconnectedness in the industry capability stack brings complexity.
List one benefit and risk each for...
1. User/customer
2. Platform leaders
3. Platform complementors
...being part of a platform.
1. User/customer
+ access to products and services under highly competitive conditions
- locked into few powerful platforms
2. Platform leaders
+ leverage huge ecosystem of complementors for own profit /operations
- extreme competition with other platform leaders
- lack of control over what complementors do
3. Platform complementors
+ access to a large group of potential customers
- dependence on platform leader
- weakened relationship to customers
- restricted access to outside options
- Risk of vertical integration from platform leader ("tipping across market"
What are the four levers of platform leadership?
- Lever 1: Scope
- Decide which complements to make in-house and which to leave to external companies.
- Overall goal is to increase the demand for the platform.
- Lever 2: Product technology
- Decide what should remain hidden and what not.
- Define where the innovation takes place.
- Lever 3: Relationships with external complementors
- Define specifications and standards between complementors
- Influence new product generation
- Lever 4: Internal organization
- Create internal organization that allows it to manage relationships with complementors
- Challenge: If some divisions compete agains complementors
Name advices for complementors.
- Try to predict and join the winning platform (winner of platform leadership war)
- Join the platform which communicates openly
- Create products that continuously enhance the value o the platform
- Keep alert to the platform leaders product plan and react to their demands
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