Case Study: Platform Business Model Analysis, Examples, and Strategies

This case study examines the platform business model, a strategy where companies provide a platform for transactions between buyers and sellers without directly producing goods or services. It highlights how platforms like Uber, Facebook, and Amazon reduce costs and increase value through network effects and ecosystem creation. The study discusses the trend of acquisitions by larger companies to expand their platforms and the strategic considerations behind these moves, focusing on factors beyond immediate financial returns. It contrasts platform business models with traditional product strategies, emphasizing the importance of targeting both buyers and sellers to build a successful platform. The provided references support the analysis with insights into mobile platform business models, innovation, and open innovation strategies.

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Platform business model actually reduces cost and increases value of the business by
providing better networking. A “platform” is a plan of action that makes an incentive by
encouraging trades between at least two associated gatherings, generally buyers and
manufacturers. So as to influence these trades to happen, “platform” utilizes and makes
expansive, versatile systems of clients and assets that can be gotten to on request. Platforms
make groups and markets with arrange impacts that enable clients to connect and execute.
Example is Uber. They have created a platform where the owners of the cars are connected to
potential hirers. Platform business helps to offer items or administrations, to produce substance
and resources. Yet, the stage proprietor accordingly does not fabricate the items that get sold.
They don't give the administrations that get offered on their stage. They don't make the substance
that gets produced every day. Facebook or YouTube has no content of itself. Uber does not have
a car of itself. Therefore thy only provide a platform for business on which the vendors and the
customers meet (Saebi and Foss 2015). This is an intelligent business strategy that reduces cost
and increases reach and possibilities.
There has been a trend of business acquisition lately where big companies like Facebook,
Google and Microsoft is buying Whatsapp , Android and Linkedin. There are various other
examples. This helps the bigger companies in increasing value of the company by acquiring
successful but smaller companies (Han, Suh and Shin 2016)
Vast organizations don't gain little organizations for immediate profits. “Income
products, benefit products, premium over the past financing”, these are measurements utilized by
venders to help decide a base worthy cost. That is the value that "pays for" enough predictable
upside that it's not worth rolling the dice against future inconveniences or the doubtfulness of an
exit. Bigger acquirers couldn't care less about little organization financials in light of the fact that

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numerically those won't influence the development or estimation of the acquirer. An organization
with $100m/yr in income growing 30% yearly won't experience the exertion, hazard, and
diversion of purchasing an organization with $1m/yr in income growing 100% every year, since
that is just a minor 1% or possibly as much as 2% of extra development. Or maybe, purchaser
conduct is established in their methodology — a blend of item postulation, their hypothesis of
their market's advancement, how they have to position for clients and against contenders, their
long haul mark improvement, geographic development designs, and similar factors.
The platform strategy is the business model where the company itself does not produce
any content or product. It basically provides a platform where existing manufacturers of products
or services may sell these to the customers (Moser and Gassmann 2016). Alibaba or Amazon are
platforms where the producers may list their products and buyers may buy. There is difference in
the promotional strategy as well. In the platform strategy the company has to target both the
buyers and sellers so that the platform is considered better than similar other platforms. In
product strategy the target is mainly the buyers and customers.

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Reference:
Han, E., Suh, B. and Shin, S.K., 2016. Developing a Reference Model for Analyzing Mobile
Platform Business: From an Ecosystem View.
Moser, D.J. and Gassmann, O., 2016, June. Innovating Platform Business Models: Insights from
Major Tech-Companies. In ISPIM Innovation Symposium (p. 1). The International Society for
Professional Innovation Management (ISPIM).
Saebi, T. and Foss, N.J., 2015. Business models for open innovation: Matching heterogeneous
open innovation strategies with business model dimensions. European Management
Journal, 33(3), pp.201-213.