What are the different platform business models available to date?
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Different Platform Business Models Available to Date
Introduction to Platform Business Models
Platform business models have revolutionized the way value is created, delivered, and captured in the digital economy. These models leverage technology to connect different user groups, facilitating interactions and transactions that were previously impossible or inefficient. This article explores the various types of platform business models that have emerged, highlighting their unique characteristics and strategies.
Marketplace Platforms
Definition and Examples
Marketplace platforms, such as Airbnb and Uber, connect supply-side participants with demand-side participants through a digital interface. These platforms facilitate transactions by providing a space where users can offer and find goods or services.
Taxonomy of Marketplace Models
Research has identified six distinct types of marketplace business models. These types vary in their approach to value creation, delivery, and capture, with some aligning closely with the sharing economy. This diversity underscores that there is no one-size-fits-all approach to marketplace platforms.
Typology of Platform Business Models
Supplier, Tailor, and Facilitator Models
A study categorizes platform business models into three main types: Supplier, Tailor, and Facilitator. Each type represents a different strategy for managing value streams and open innovation. The Supplier model focuses on providing essential resources, the Tailor model customizes offerings to meet specific needs, and the Facilitator model enables interactions between different user groups.
Systemic Logic and Value Co-creation
Another perspective on platform business models emphasizes a systemic logic, where value is co-created through network relationships rather than controlled by a single firm. This approach highlights the importance of connectivity and sociality among actors in the platform ecosystem.
Multi-sided Platforms
Evolution and Competitive Strategies
Multi-sided platforms, which serve multiple user groups simultaneously, have evolved significantly. Success in this space often depends on the complexity of the business model design and the strategic use of innovation and imitation. These platforms must navigate competitive battles by creating intricate systems of activities that offer unique value propositions.
Mobile Payment Platforms
Mobile payment platforms face the challenge of achieving critical mass. To address this, they innovate their business models by rethinking relationships with retailers, forming partnerships within the payment ecosystem, and leveraging mobile technology. These strategies help them scale and adapt to different geographic markets.
Technology-Driven Platforms
Innovation through Acquisitions
In the technology industry, platform business models often evolve through strategic acquisitions. Companies acquire technology firms to innovate their core business models and create new value exchanges. Partnerships with external entities further enhance the platform's capabilities and competitive edge.
Free-Driven Web-Based Platforms
Configurations and Value Flows
Free-driven web-based platforms offer products or services at no cost, challenging traditional business models. These platforms rely on user-innovators who contribute to value creation processes. Research has identified five configurations of free-driven business models, each with different revenue sources and value flows.
Regional Variations: The Chinese Platform Business Group
Unique Strategies and Organizational Forms
Chinese platform firms, such as Tencent and Alibaba, have developed unique business models that differ from their Western counterparts. These firms use strategies like listing operations separately on the stock market and interfirm cross investments. This has led to the formation of Platform Business Groups (PBGs), which extend and transform traditional Chinese business group models.
Conclusion
Platform business models are diverse and continually evolving. From marketplace platforms to multi-sided and technology-driven models, each type offers unique strategies for value creation and capture. Understanding these models' nuances can help businesses and researchers navigate the complex landscape of digital platforms.
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