Chapter 4 Flashcards
What is the value of an open platform in digital transformation?
Creates value by enabling collaboration, innovation, and flexibility. By opening up their platforms to outside developers, companies can create a rich ecosystem of apps and services that enhance their core offerings and drive growth.
What is the value of digital complements in digital transformation?
Digital complements in digital transformation can create value by enhancing the customer experience, increasing operational efficiency, and driving revenue growth.
What value do digital complements add to a physical product?
Digital complements can add value to a physical product by creating a more engaging and personalized customer experience.
For example, a physical product like a smartwatch can be enhanced with digital complements like a mobile app that allows customers to track their fitness goals and receive personalized recommendations.
Can you give an example of a company that has successfully used digital complements to enhance its products?
Apple is a great example of a company that has successfully used digital complements to enhance its products.
For example, the iPhone is a physical product, but it is enhanced by digital complements like the App Store, which allows customers to download a wide range of apps that add value to their iPhone experience.
Additionally, the Apple Watch is a physical product that is enhanced by digital complements like the Health app, which allows customers to track their fitness and health data.
In what ways can an app be monetized?
- Purchase
- Advertisement
- Upgrades
What are the four gifts of monetization?
- Direct Cross-Subsidies
- The Three-party Market
- Freemium
- Non-monetary Markets
What is direct cross-subsidies?
Direct cross-subsidies is a gift way of monetization where a company offers a product or service for free or at a reduced price to attract customers, with the intention of monetizing a related product or service.
For example, a gaming console may be sold at a loss to attract customers, with the intention of making a profit on game sales.
What is the three-party market?
The three-party market is a gift way of monetization where a company acts as a mediator between two groups, and charges a fee for facilitating transactions.
For example, a company may provide a platform for buyers and sellers to connect, and charge a fee for each transaction.
What is freemium?
Freemium is a gift way of monetization where a company offers a basic version of its product or service for free, but charges for premium features or upgrades.
One example of a company that uses freemium as a gift way of monetization is Spotify. Spotify offers a free version of its music streaming service, but charges for premium features like ad-free listening and offline playback. This model allows Spotify to attract a large user base with the free version, while still generating revenue from paying subscribers.
What are non-monetary markets?
Non-monetary markets are gift way of monetization where a company provides a platform for users to exchange goods or services without the use of money. For example, a company may provide a platform for people to exchange services like language lessons or pet-sitting without the use of money.
What is a platform?
Platforms are online environments that take advantage of the economics of free, perfect, and instant. To be more precise, a platform can be defined as a digital environment characterized by near-zero marginal cost of access, reproduction, and distribution
How can companies get benefits from platforms?
Companies can derive benefits from platforms either by building a platform themselves or by participating in an existing platform.
