Platform Business Models: Frameworks, Concepts and Design

✍ Scribed by R. Srinivasan

• Publisher: Springer
• Year: 2021
• Tongue: English
• Leaves: 352
• Series: Management for Professionals
• Category: Library

✦ Synopsis

This book introduces platform firms as unique business models. Leveraging on the early literature on network economics and strategy frameworks, this book explores how platform business firms evolve in the modern business world. Taking a strategic perspective, this book engages the reader with core concepts, case studies, and frameworks for analyzing platform business firms. This book differentiates platform business firms from traditional pipeline firms; explores engagement with different actors, value creation, and operations of platforms; elucidates resources and capabilities of platform firms that provide them sustained competitive advantage; analyzes performance levers in operating platform business models, including complementarities with other business models; and discusses the sustainability of platform business models, in the face of regulatory and societal challenges, among others.

The book is designed as a primer for entrepreneurs setting up and operating platform business firms, senior managers in large corporations repurposing their resources to initiate network dynamics in their businesses, early career managers, and professionals engaging with myriad platform firms for their professional and personal needs. This book intends to provide a decision-maker with a portfolio of decisions to make to create, operate, sustain, and generate value out of a platform business firm. It is also useful for policy professionals to appreciate the economics and policy implications of regulating and governing platforms in a post-digital world.

✦ Table of Contents

Preface
Acknowledgments
Contents
About the Author
1 Introduction
What Are Business Models?
Models
Business Models
Platform Business Models
Single- and Multi-sided Platforms
Network Effects
Platforms Make Markets Efficient
Platform Roles
Platforms as Networks
Complementarity, Compatibility, and Standards
Consumption Externalities
Switching Costs and Lock-In
Significant Economies of Scale
Platforms as Ecosystems
Key Platform Decisions
2 GRAB.in™: Enabling Hyperlocal
Introduction
Grab’s Journey
Grab.In Business Model
The B2B Switch
Platform Architecture—Hot Spots and Bikers
Pricing Model and Unit Economics
First Mover Advantage
Delivery Challenges
Multi-homing
Diverse Perspectives
Musings from the Delivery Team
Operations Behold!
Powering Technology
Investments into Grab.in
Competitive Topography
Shadowfax
Dependo.com
Ekart Logistics
ElasticRun
Hyperlocal Aspirations
Road Ahead
3 Network Effects
Externalities, Network Externalities, and Network Effects
Defining Network Effects
Same-Side and Cross-Side Network Effects
Positive and Negative Network Effects
Properties of Network Effects
Strength of Network Effects
Direction of Network Effects
Nonlinearity of Network Effects
Leveraging Networks for Growth
Coring
Tipping
Products, Services, and Platforms
4 Faircent™: Powering P2P Lending Revolution
Introduction
Faircent’s Journey
Funding Support
Regulatory Rigmarole
Shrinkage of Competition
Faircent Business Model
Platform Architecture—Lenders and Borrowers
Pricing Model
Handling Investment Risks
First Mover Advantage
Monetizing Faircent Stack, Open APIs, and Developer Ecosystem
Competitive Topography
Lending Club
PayTM Micro-finance Platform
i2i Funding
CashKumar
LenDenClub
Monexo
Faircent’s Aspirations
5 Value Creation in Platforms
Value Architecture
Discovery
Matching
Transaction
Evaluation
DMTE as a Cycle
Summary
6 Swiggy™, Foodora™, and Yelp™: Hyperlocal Platforms
Introduction
Food Delivery Business
Origin of the Journey
Aggregation Versus Delivery
Swiggy
Food Delivery Process
Business Model
Sustainability and Growth: Addressing Multi-homing and Envelopment
Foodora
Food Delivery Process
Business Model
Sustainability and Growth Opportunities
Yelp
Business Model
Growth Opportunity
Sustainability of the Business Model
The Road Ahead
7 Network Mobilization
Strategic Dimensions: Resources and Users
User Dimension
Resource Dimension
Solving the Penguin Problem
User Attraction Strategies
Resource Leverage Strategies
Summary
8 BharatMatrimony.com
Matrimony in India
Evolution of BharatMatrimony.com
Diversification
Platform Architecture
Marriage-Related Services
IndiaProperty.com
Way Forward
9 Just Dial Limited
Evolution of Just Dial
The (Traditional) Just Dial Business Model
The JD Search Plus Business Model
The “JD Shop Online”
10 Practo
Making Practice Management Easy: About Practo Ray
Helping Patients Find Doctors: Practo Search Through Practo.com
Practo Ads
11 Pricing and Subsidies
Subsidy and Money Sides
Relative Strength of Cross-Side Network Effects
Relative Price Sensitivity
Relative Value Attached to Quality of Products and Services
Marginal Costs of User Addition
Relative Differentiation Among Users
Relative Bargaining Power of Complementors
Pricing Models
Subscription Pricing Models
On-Demand Pricing Models
Razor-Blade and Reverse Razor-Blade Pricing Models
Freemium Pricing Models
Auction Pricing Models
Free Pricing Models
Pricing and Platform Scale
12 Zomato™ Gold: Platform Overreach
Introduction
Hyperlocal Food Delivery Business
Firm’s Origin
Zomato’s Gold Program
Zomato Gold Design: A Unique “Loyalty” Program
Positive Network Effects for Restaurants
Negative Network Effects
Restaurants’ Reactions
The Way Forward
13 Platform Architecture
Ecosystem Value
Open and Closed Platforms
Trade-Offs in Opening Platforms
Shared and Proprietary Platforms
Proprietary Platform
Shared Platform
Joint Venture Platforms
Licensing Platforms
Platform Design in WTA Markets
Matrix of Platform Architecture
Platform Architecture and Growth
Interoperability
Licensing More Partners for Configuration and Customization
Opening the Core
14 Delhivery: Leveraging the Platform
About Delhivery
Initial Thoughts of the Idea
Enterprise Story 2011–2015
Growth Over the Years
Current Status
Delhivery Businesses
Express Services
Customer Segments
Operations
Fulfillment Services
C2C Logistics Services
Hyperlocal Services
Delhivery’s Services
Pricing
Transportation Services
Fulfillment Services
Technology Services
Pricing of Bundles
Opportunities and Challenges
15 Winner-Takes-All Dynamics
What Are WTA Markets?
Strong and Positive Network Effects
High Multi-homing Costs
User Preference for Special Features
Economics of WTA Markets
Impact of WTA Markets on Complementors
Coordination Problems
Tipping/Standardization
Multiple Equilibria
Lock-In Costs
Evolution of WTA Markets
Pioneer’s Dilemma and Penguin Problems
Subsidization and Monetization
Pivot Dilemma
Remora Strategy
Integration Dilemma
Relationship Dilemma
Regulating WTA Markets
Predatory Pricing
16 Tally Solutions Pvt. Ltd.: Orchestrating the Ecosystem
Introduction
Evolution of Tally Solutions
Tally the Boxed Product (1988–2012)
Positioning Tally in the Financial Accounting Market
Bouncing Back from the VAT Debacle
Distribution and After-Sales Service/Support for the Product
Tally: The ERP Platform (2012–2020)
Tally’s Offerings
Release 5.X
Tally Pricing
Distribution
Dealing with Piracy
Competitors
Tally: Evolution of the Ecosystem (2020 Onward)
TallyPrime
TallyPrime Versus Tally.ERP 9
Upcoming TallyPrime Features
TallyPrime Pricing
Tally Software Services—The Ecosystem Enabler
17 Platform Envelopment
Platform Competition
Platform Scope
Breadth and Stickiness of the Complementor Network
Switching and Multi-homing Costs for Users
Intermediation Efficiency
Platform Envelopment
Follower Advantage
Staircase Strategies
Competing Against Envelopment
Mitigating Envelopment
Racing (to Acquire Customers)
IP Protection
Caging of Customers
Managing Multi-platform Bundles
18 Tarnea Technology Solutions: Competing in a Winner-Takes-All Market
Introduction
Birth of Tarnea
Pharmaceutical Retail in India
Retail Pharmaceutical Value Chain
Principal
Distributors
Retailer
Online Pharmacy
Retail Pharmacy Chains
Independent Retail Pharmacy
Evolution of Tarnea
Creating the Product
The Pilot
Product Development at Tarnea
Requirements Phase
Prototyping
Development
Testing
Tarnea—the Platform
Tarnea’s Ecosystem
Ecosystem View
Pharmaceutical Retail—A Winner–Takes-All Market
Multi-homing Costs
Network Effects
Opportunities for Differentiation
Pharmaceutical Retail—A Density Business
COVID-19 Acceleration and Challenges
Digital Onboarding
Way Forward
19 Complementary Business Models
Dominant Business Models
Multi-sided Platforms
Servitization and SaaS
Clusters
Communities and Networks
Ecosystems
Combined Business Models
MSPs and SaaS
MSPs and Communities
MSPs and Clusters
MSPs and Ecosystems
20 QWIKCILVER™ and WOOHOO™: Developing a Complementary Platform
Introduction
The Qwickcilver Enterprise Journey
The Gift Cards Industry
Market Size—India and the USA
Competition and Envelopment Threats
Stellr
Blackhawk Network Holdings
InComm
Ceridian Stored Value Solutions
Gyft
Qwikcilver Business Model
Foray into Distribution Business—GiftBig Portal
Evolution of Pricing Model
Woohoo—Qwikcilver’s Multi-Sided Platform
Sustaining Growth
Technology Choices
Integrating with PoS
Working with Card Manufacturers
Influencing the Regulatory Framework
Issues with Traditional Gift Cards
Opportunities in International Markets in 2017
Road Ahead
Appendix 1: Types of Gift Cards
Appendix 2: Gift Card Life Cycle and Critical Success Factors (Source Author’s Visualization)
21 Contemporary Issues in Platforms
Social Impact of Platforms
Content
Data
Competition
Platform Governance
Platforms as Marketplaces, Gatekeepers, and Editors
The Problem of Many Hands
Platforms in Contestable Markets
The Rise of Platform Conglomerates—FANGAM
Platforms in Multi-market Competition
Platforms and International Regulations
Conclusion
22 JOSEPHS®: the Service Manufactory
The Birth of the Idea
The Concept and Architecture
JOSEPHS® as an Open Innovation Intermediating Platform
Customers
Tenant Firms
Fraunhofer IIS
FAU
Network Effects in the JOSEPHS® Ecosystem
Measuring JOSEPHS®’ Success: After One year of Operations