Platform Business Models
3-4 hours per week
This course provides a strategic perspective to understanding platform business models. In contrast to traditional pipeline businesses, platform business models need different treatment, both in terms of strategies and operations. This course will discuss the unique economics of platform businesses, and the specific decisions that leaders in platform firms must consider for successful results.
The first module of this course will introduce the learner to the core concepts around platforms and network economics.
The second module will elaborate on network effects in the context of platforms and ecosystems and provide insights into how platforms mobilize their networks and solve the penguin problems.
The third module elucidates the criteria used by platform firms in their pricing decisions and introduces the various pricing models available for platform pricing.
The fourth module highlights the value architecture of platform firms, including trade-offs around openness and proprietary nature of complement engagements.
The final module provides insights into competing in a platform ecosystem, including managing oligopolistic markets, and issues in regulating platforms
Week 1: Introduction
Introduction to platform business models and core concepts, including the basics of network economics
Week 2: Network mobilization
Managing network effects in platforms and ecosystems, including different forms of network effects and solving penguin problems.
Week 3: Platform pricing
Decisions around pricing in platforms, including which side to monetize and subsidize, and various pricing models
Week 4: Architecting a platform business
Introduction to value architecture; different utilities (value creation) provided by platform firms; trade-offs around platform architecture; and winner-takes-all markets
Week 5: Competing in a platform ecosystem
Competing against envelopment, racing to acquire customers, platform risks, and regulations
By the end of this course you will be able to:
- Understand the differences between conventional and platform business models
- Appreciate the economics and strategies behind building a platform firm
- Understand the role of complementors and other ecosystem participants in the operations and success of platform firms
This course is designed from a business school perspective. The target audience for the course is diverse: you could be a practising manager, someone who has signed up for a course at college, an entrepreneur interested in platform business models, a policy professional seeking to gain a better understanding of platform businesses or just someone who wishes to have a deeper understanding of the subject.