MULTI-SIDED PLATFORMS: A STRATEGIC PERSPECTIVE ON VALUE CHAIN AND STRATEGIC COSTS

Multi-sided platform markets are becoming an increasingly important part of the economy. These market platforms have had a large impact on the recent information technology boom, and undoubtedly, they will continue to be important, as internet based commerce expands its scope to include both new and old economy firms. In addition to internet commerce, other increasingly important industries, such as credit cards, operating systems, shopping centres, and mass media, are all governed by the economics of multi-sided platforms. A theoretical review of businesses in different industries shows that multi-sided platform businesses devise entry strategies to get multiple sides of the market on board and devise pricing, product, and other competitive strategies to keep multiple customer groups on a common platform that internalizes externalities across members of these groups; while reducing strategic costs.

Target to be published in Journal of Strategy and Management.

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