Platform Performance Based On The Network Externality

An increasing number of markets today are organized around platforms that enable consumers to access and/or purchase various goods and services. Considering the presence of network externality, we study the precondition in which whether the buyer will join the platform. Moreover, this paper investigates the performances of platform in the supply chain in which the leadership belongs to the retailor. We find the optimal decision-making strategies, and the sellers will join the online platform when the network externality is large enough. In addition, the retailer’s optimal profit and demand on offline platform will increase with the rising of network externality, whereas their demand on online platform will decrease, and the manufacturer’s optimal profit and demand on online platform will increase

A Stirring Effect of the Loss Leader Strategy in a Two-Sided Online Platform

Loss leader strategy refers to a pricing strategy in which sellers set much lower prices than the original ones for specific products to attract user attention. Similar to brick-and-mortar stores, online marketplaces often try to expose their platforms more visibly to potential buyers by offering a particular product at a lower price. Yet, the effects of the loss leader strategy on the online marketplaces is indeterminate and largely remains an empirical question due to distinguished characteristics of online marketplaces from the traditional retail setting. This study examines the effects of the loss leader strategy in the context of the two-sided online platform, focusing on the changes of both buying and selling sides after the introduction of loss leader. We collaborate with an online travel marketplace that introduced loss leaders (ticket products with lower price) to parts of sub-markets, providing a natural experimental setting for examining the effect of the loss leaders

Adoption of Software Platforms: Reviewing Influencing Factors and Outlining Future Research

Software platforms have received attention as the dominant model for cooperative software development. Growing the ecosystems around software platforms through increasing adoption by users and developers is of great importance for platform owners. However, there is a lack of research on how to increase adoption and growth of software platforms systematically. To address this issue, we conduct a literature review and make an in-depth analysis to uncover and organize factors that drive adoption of software platforms. Additionally, we derive effective directions of these factors on the respective sides. Finally, we outline three avenues for future research: aligning research on platform governance and platform launch and growth, taking an evolutionary, growth-oriented perspective on governance of software platforms and further detailing platform launch and growth strategies towards a design theory for platform launch. This paper contributes to the understanding of software platforms by reviewing factors driving adoption and triggering network effects

The digital transformation of business models in the creative industries: A holistic framework and emerging trends

This paper examines how digital technologies facilitate business model innovations in the creative industries. Through a systematic literature review, a holistic business model framework is developed, which is then used to analyse the empirical evidence from the creative industries. The research found that digital technologies have facilitated pervasive changes in business models, and some significant trends have emerged. However, the reconfigured business models are often not ‘new’ in the unprecedented sense. Business model innovations are primarily reflected in using digital technologies to enable the deployment of a wider range of business models than previously available to a firm. A significant emerging trend is the increasing adoption of multiple business models as a portfolio within one firm. This is happening in firms of all sizes, when one firm uses multiple business models to servedifferent markets segments, sell different products, or engage with multi-sided markets, or to use different business models over time. The holistic business model framework is refined and extended through a recursive learning process, which can serve both as a cognitive instrument for understanding business models and a planning tool for business model innovations. The paper contributes to our understanding of the theory of business models and how digital technologies facilitate business model innovations in the creative industries. Three new themes for future research are highlighted

Co-creation in networks of SMEs: a conceptual model of the co-creation process

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Complementor dedication in platform ecosystems: rule adequacy and the moderating role of flexible and benevolent practices

Dedicated complementors are devoted, faithful, and willing to invest in their partnership with a platform owner. Since such complementors promise continuous value co-creation, complementor dedication is an essential objective of platform governance. However, as dedicated complementors also increase their vulnerability vis-à-vis the platform owner, platform governance needs to strike a balance between satisfying global ecosystem needs and the local partnership needs. To understand this challenge better, our study develops six hypotheses on how two fundamental governance mechanisms – i.e., rules and the way in which these rules are practised – independently and symbiotically drive complementor dedication. We test these hypotheses using survey data from 181 complementors. Our findings show that complementors become more dedicated to a platform owner, the more adequate they perceive the rules to be. Furthermore, our findings suggest two sensible strategies to actualise the potential of adequate rules. Platform owners should either refrain entirely from practising rules with situational flexibility and benevolence, thereby achieving moderate complementor dedication. Alternatively, they should practice rules with both flexibility and benevolence at the same time, thereby maximising complementor dedication. Our findings contribute to the literature on platform governance and broader governance literature

Main differences in strategic decisions between sharing economy platforms and collaborative consumption platforms

Literature on sharing economy is still very limited and lacks clear boundaries to which businesses should and should not be included in its sphere. The present study defines the differences and similarities between the business models of pure sharing economy platforms, such as Turo, and collaborative consumption platforms, such as DriveNow, as both are frequently included in the sharing economy sphere. Using the business model canvas framework to compare each of the nine elements that constitute both business models, results show that the customer interface is the only similarity between the two business models while the value proposition, infrastructure management and financial aspects differ significantly between sharing economy and collaborative consumption platforms. Based on these results, it is clear that pure sharing economy platforms and collaborative consumption platforms should not be treated indifferently as part of the sharing economy sphere as generalizations would lead to wrong conclusions based on incorrect assumptions

Platform Competition: A Systematic and Interdisciplinary Review of the Literature

Over the past three decades, platform competition—the competition between firms that facilitate transactions and govern interactions between two or more distinct user groups who are connected via an indirect network—has attracted significant interest from the fields of management and organizations, information systems, economics, and marketing. Despite common interests in research questions, methodologies, and empirical contexts by scholars from across these fields, the literature has developed mostly in isolated fashion. This article offers a systematic and interdisciplinary review of the literature on platform competition by analyzing a sample of 333 articles published between 1985 and 2019. The review contributes by (a) documenting how the literature on platform competition has evolved; (b) outlining four themes of shared scholarly interest, including how network effects generate “winner-takes-all” dynamics that influence strategies, such as pricing and quality; how network externalities and platform strategy interact with corporate-level decisions, such as vertical integration or diversification into complementary goods; how heterogeneity in the platform and its users influences platform dynamics; and how the platform “hub” orchestrates value creation and capture in the overall ecosystem; and (c) highlighting several areas for future research. The review aims to facilitate a broader understanding of the platform competition research that helps to advance our knowledge of how platforms compete to create and capture value

Governance Mechanisms in Digital Platform Ecosystems: Addressing the Generativity-Control Tension

Digital platform owners repeatedly face paradoxical design decisions with regard to their platforms’ generativity and control, requiring them to facilitate co-innovation whilst simultaneously retaining control over third-party complementors. To address this challenge, platform owners deploy a variety of governance mechanisms. However, researchers and practitioners currently lack a coherent understanding of what major governance mechanisms platform owners rely on to simultaneously foster generativity and control. Conducting a structured literature review, we connect the fragmented academic discourse on governance mechanisms with each aspect of the generativity-control tension. Next to providing avenues for prospective digital platform research, we elaborate on the double-sidedness of governance mechanisms in fostering both generativity and control